Reservation Policy for Small Industries

Reservation Policy for Small Industries K R G Nair THE dismissal, in the reply by Bala Subrahmanya (1995b), of my comments [Nair 1995], as just another emotional outburst to illogically justify the continuation of technologically inefficient small scale sector at the cost of the more efficient large sector, is patently irrational. He seems to have overlooked my very explicit statement that in cases where there are no economies of large-scale production and a small producer chooses to remain small despite this, a policy of reservation will abet this tendency and thus stand in the way of competition and hence of efficiency. Such underlying logic, can, by no stretch of imagination, be dubbed as blind enthusiasm to favour the reserved SSI sector.