3 Shifts in policy

Policies specific to the protection and reservation of small scale enterprises in India has its historical roots way back in the pre-Independence period. Planners conceived a vision of industrialized India largely depending on growing capitalist enterprises achieved either by transforming the existing merchant capital or by transforming the pre-capitalist producers who exchanged in the market on a customary basis. Despite the varying perspectives on account of the path of this transformation to modernism, especially between Nehruvian and Gandhian way, small enterprises gained importance in policy resolutions both in the pre-Independence and post-Independence period. This was also driven by political considerations in the context of the Independence movement primarily to integrate the peasant mass into the movement, with a view to addressing the massive growth of urban unemployment during that period. In the Second Five Year Plan ¹ within the Mahalanobis Model ² the role of small enterprises was conceived to be the sector producing consumer goods, especially wage goods for the economy.