Public Policy: Is it really well thought out? From Sunil Jain's analysis on Job vs growth in Business Standard:
In the textiles sector where India has a very low export share, for instance, years of tax-breaks for small units discouraged larger units from coming up and stunted the country’s ability to service large orders.
The share of big players is 93 per cent in the spinning sector, to cite one instance of the importance of large manufacturers, and India’s share of global exports is 26 per cent.
In the weaving sector, larger players have only a 4 per cent share in local production, and their global share is a mere 3 per cent. Read this article: Part 1Part 2Part 3
This I believe is a classic case of a public policy thought out from the narrow angle of helping small scale units alone rather than about the textile sector at large. Why do we want to have only small scale textile units grow? Or why do we want people to get jobs by only incentivising small scale. Shouldn't we do things to achieve the final objective that is more job and higher growth for textile industry as a whole rather than assume one solution i.e. the small scale is THE solution and then incentivise that?
If we incentivise small scale and it achieves 3 percent global export share and 10,000 people work in it, is it better than getting 25% share and 70,000 people getting jobs?
