Technology and Market Structure under Government Regulation- A Case Study of Indian Textile Industry

Technology and Market Structure under Government Regulation A Case Study of Indian Textile Industry Ashok V Desai The promotion of small-scale production has been and continues to be an important element in Indian Ideology and in government policy. The means adopted to promote it in the textile industry consisted of discrimination in the taxation and licensing against large mills mid subsidies to small industry through Khadi and Village Industries Commission and through co-operatives. If we look at the country's cloth production as a whole, these policies have had little success in changing the technology mix, but they have had a strong influence, quite unrelated to policy objectives, on the firm size composition. They have prevented the growth of composite mills, and have led to the installation of most of the new looms in extremely small enterprises.