d - Mahratta Chamber Of Commerce Industries & Agriculture Pune

pronouncements often assumed that the intended developmental goals. The sized enterprises. Several protective
the emergence of a strong small policy package contains various measures have therefore been
enterprise sector would help in the promotional and protective devices introduced. First, the scale of production
following ways: which are handled by a comprehensive is demarcated for the purposes of
institutional structure. Separate boards official assistance. The cut-off point,
• generating large-scale employment, exist for hand loom weaving, however, has changed from time to time
wage goods and incomes in a fairly handicrafts, and coir; there is a Khadi (Table 1). During the Janata regime
dispersed manner; (coarse handspun cotton cloth) and (First Non-Congress Government after
• mobilizing dormant skills and Village Industries Commission to look independence) in 1977, a new category
resources, and enhancing the after the khadi and other village designated as “tiny” enterprises, having
supply of entrepreneurship; enterprises (hand pounding of rice, investment in plant and machinery up to
• energizing village economies and extraction of edible oil, gur and Rs. 0.1 million located in towns with a
aiding the process of backward khandsari - a form of unrefined sugar - population of less than 50,000, was
area development; palm gur, leather, soap, hand-made created. In 1980, the investment limit for
• playing an important role in the paper, etc.); the Ministry of Micro, Small “tiny” enterprises was raised to Rs.0.2
overall process of industrialization and Medium Enterprise to help the million. This limit was subsequently
without disturbing the ecological growth of rest of the small-scale raised to Rs. 0.5 million and the
balance. enterprises. locational restrictions were removed.
It is clear that not all the components of District (an administrative unit) The policy document (1991) also
the small-scale sector, such as village, industries centers have been set up to recognized industry-related services
cottage and modern enterprises, were facilitate the growth of the small and and business enterprises, irrespective
able to move at the same pace towards medium enterprise sector. Such an o f t h e i r l o c a t i o n , a s a k i n t o
the intended objectives. The reason for elaborate institutional framework has manufacturing industries with an
packing these diverse components of b e e n r e s p o n s i b l e f o r s e v e r a l investment ceiling corresponding to
small firms into the same policy basket promotional measures such as an “tiny” enterprises. It was also noted that
is rooted in the colonial period. The ambitious industrial estate programme, small-sized enterprises, other than
approach towards small-sized artisan and entrepreneurial training “tiny” enterprises, would be entitled to
enterprises, almost as part of the programmes, and various other one-time benefits (preference in land
struggle for independence, has been enabling devices - concessional allocation/power connection, skill and
swayed by two divergent streams of finance, help in procuring critical inputs, technology upgrading facilities)
thought. Gandhians have been keen on and technical and marketing help. The whereas the “tiny” enterprises would be
the protection and expansion of official programme is one of the most sustained on a continuous basis in
traditional, mainly rural, household comprehensive in the Third World and terms of easier access to institutional
enterprises. The other strand of thinking covers, at least on paper, almost every finance, priority in the government
has been largely shaped by the report phase of entrepreneurial activity: choice purchase programme and relaxation of
of the Ford Foundation Team of product and site, technical and the provisions of labour laws.
[Government of India, 1954], which financial help in the installation of
emphasized the role of modern small- machinery, provision of raw materials, The current state of affairs is shaped by
scale units as an organic component of and help in marketing and so on. Micro Small Medium Enterprises
the emerging industrial structure. Development Act, 2006 (MSME Act,
The policy frame also recognises that, 2006). The act apart from considerably
The policy frame constitutes an attempt despite all the promotional measures, enhancing investment limits for various
to steer the highly diverse structure of the small scale units would not be able categories, also makes micro and small
the MSE in a desirable direction to meet to withstand competition from large- enterprises sector more inclusive by
Table – 1
Investment limit (applicable only to plant and machinery, Rs. Million)
1966 0.5 1.0
1975 1.0 1.5
1977 1.0 1.5 0.1
1980 2.0 2.5 0.2
1988 3.5 4.5
1991 6.0 7.5 7.5 0.5
Source: S P Kashyap, (1992)
Normal Ancillaries Export oriented Tiny units
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