ABSTRACT
This article presents an evaluation of the government policy designed for the modern segment of the small-scale manufacturing sector, or small-scale industries (SSIs), and argues that the policy has been and continues to be supply-driven and paternalistic, perpetuating a dependency syndrome. The unit-centered atomistic approach of this policy has been dominated by protective and discretionary promotional measures with perverse incentive effects for the healthy growth of this segment (Tendulkar and Bhavani 1997). This article underlines the need to move away from continued protection and bureaucratic discretion-based promotion, and argues for a radical shift in this policy towards a demand-driven, group-oriented and collective effort-based (rather than atomistic) approach.
