Abstract
Small scale industries (SSIs) have grown and improved their share in international trade during the reform period. This paper documents the reform agenda and its implications for SSIs. Despite the recommendations of the Abid Hussain Committee for complete dereservation of items reserved for SSIs and a grand or Rs 5 billion of assistance to the sector, piecemeal approach to the suggested changes meant that while quantitative restrictions were removed facilitating liberal import, due to continuation of reservation non-SSI units still cannot produce the reserved items. In actual practice it amounts to, paradoxically, SSIs enjoying protection from domestic non-SSI units, but facing competition from MNCs from abroad. SSIs hold the key to future employment growth. Governments cannot be expected to tackle small enterprise development properly. It requires a radically different mindset. Apart from legal and institutional reforms, the paper calls for rigorous exposure to international trade through trade fairs and trade delegations, and a collective voice and strategic partnering among SSIs.
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