Essays in Honour of J. George Waardenburg
Edited by Servaas Storm and C. W.M. Naastepad
Chapter 15: Small is big, but it it still beautiful? Small-scale industries: An India-China dialogue
15. Small is big, but is it still beautiful? Small-scale industries: An India–China dialogue Ashwani Saith 1. SMALL-SCALE INDUSTRIES: A GOOD PRESS There are many virtues, imagined or real, ascribed to small-scale industrialization. Some of these are admitted by default on the assumption that small enterprises would inherently be diﬀerent and have characteristics opposite to large-scale enterprises. Chernobyl, the Bhopal gas tragedy and the giant oil-spills all tend to aﬃrm such a reading. Small has thus been conﬂated with being employment-friendly, environment-friendly and hinterland-friendly, or simply people-friendly. Small is big, but is small still beautiful? There are indications, in the case of small-scale industries in Asia, that small has grown to be strong, and not so pretty. The small-scale sector has been a major contributor to Asian economic growth, and nowhere more so than in China, where township and village enterprises (TVEs) have posted the highest sectoral growth rates ever since the reforms initiated in 1978, and probably even before then. While macroeconomic performance in India has lagged behind China by far, here as well the smallscale sector has generally outstripped the large-scale organized formal manufacturing sector in the matter of growth, employment and exports. This chapter oﬀers a comparative assessment of the factors underlying the contrasting performances of the two emerging Asian economic giants, and highlights key outstanding policy issues that are likely to occupy the foreground. The main focus is on the Indian case, with the Chinese experience introduced selectively for comparison. 2....
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