Small business: promotion of exports and technology

Abstract

Small scale industries play a predominant role in Indian economy in terms of output, employment and exports. The discussion on new economic policies has been mostly on the effect on large industries and foreign direct investment. In addition to changes in the industrial policy effecting the large sector, there are also some changes in respect to small scale industry policies. In this paper, there are four actions - the first section gives an overview of the role of small business in Indian economy. Section II gives the policy framework under which small scale industries were operating and the recent changes introduced since August 1991. Out of the policy changes, two aspects are taken for detailed review. They are: export policy in performance through free trade zones and second, the modernisation and technological innovations. Section III gives the export contribution to small business and the special attempt to export through EPZs and their contribution is given. As a contrast the Chinese attempt in their special economic zones is briefly touched. Section IV gives a comparative view of different approaches adopted in a few countries for modernising small scale industry. India tried through DCSSI, creating science parks, software technology parks and electronic hardware technology parks. As a contrast to this the country experiences of Korea, Germany, Japan, UK and USA are given.