Small-scale enterprise policy in developing countries: an analysis of India's reservation policy
✍ Scribed by Homi Katrak
- Publisher
- John Wiley and Sons
- Year
- 1999
- Tongue
- English
- Weight
- 131 KB
- Volume
- 11
- Category
- Article
- ISSN
- 0954-1748
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✦ Synopsis
This paper examines the eects of India's reservation policy to help the smallscale enterprises. Empirical tests showed three main results. Firstly, reservation has increased the number of production units, per item produced. Secondly, the units that produce mainly reserved items have higher levels of installed capacities, than those making mainly unreserved items, but the former do not have higher levels of production, thereby resulting in signi®cantly lower levels of capacity utilisation. Thirdly, reservation has not helped reduce the problem of closures of small units. The empirical results suggest that reservation may have brought little help to production and employment in the small-scale units nor to the consumers of their products, while at the same time it may have restricted production and employment in the large units. Thus reservation may have caused a loss in overall economic welfare.