Question

State and explain any two steps undertaken by the Government of India for the protection and promotion of Small-scale Industries between 1950–1990.

Hint:

Small-scale industries were viewed as engines of inclusive growth, and protectionist policies were intended to shield them from large-scale competition.

Answer 1

From 1950 to 1990, the Indian government supported Small-scale Industries (SSIs) due to their ability to create jobs and distribute wealth fairly. Two key actions were:
Product Reservation: The government restricted certain consumer goods (e.g., textiles, leather goods, toys) to small-scale industries only. This prevented larger industries from producing these items, fostering growth for smaller businesses without competition from larger, capital-intensive companies.
Financial Aid and Subsidies: Institutions like SIDBI (Small Industries Development Bank of India) and SFCs (State Financial Corporations) offered SSIs affordable loans and financial help. Subsidies, low-interest loans, and modernization assistance were provided to improve their competitiveness and long-term viability.
These actions protected SSIs and encouraged their involvement in industrialization and rural advancement.