ABSTRACT
The progress of industrialization in India, a labour-surplus and a vast domestic market-based economy, has affirmed the dominance of micro and small enterprises (MSEs), in terms of their contribution to job generation and addressing regional disparities in growth; this has clearly invalidated the prognosis that small enterprises would, eventually, give way to the scalar advantage of the large. In fact, MSEs have emerged as both flexible and dynamic in accommodating workers with diverse skill levels (including the unskilled ones) and catering to the myriad forms of demand, as emerges in a calibrated income-distribution scenario. It is no wonder that this sector, despite its numerous frailties, has continued to attract policy attention for over seven decades now, if one includes the suggestions made by the National Planning Committee, set up during the late 1930s. Despite the vitality of this sector, concerns remain regarding the policy support it has received. That the sector's performance during the post-economic reforms period, which has over-emphasized external orientation as a way of ensuring competitiveness, has been particularly unimpressive calls for a serious enquiry into various issues concerning the promotion of MSEs on a sustainable basis. Some of these issues are, incidentally, age-old and some are of recent origin; they include constraints in accessing loan finance, inadequate basic infrastructure, poor innovation resulting in substandard product quality, cluster development and neglect of the labour question, including skill formation, safety at workplaces and social security.
