ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Growth and Recession in Small-Scale Industry

The powerloom industry has done exceptionally well in India, in the long run and especially during an export boom after trade liberalisation in the late 1980s. Its growth illustrates several intuitions of recent international literature on small firm dynamics. An export recession in 1996-98, however, showed that the growth had happened without basic changes in the technological and organisational capability of the industry. Using the example of an export-oriented weaving region, the paper describes the origin and presents conditions of the industry, its major handicaps, how it tries to address its handicaps, and what kind of policy initiatives may be needed to deal with them. The paper also suggests that some recent changes in organisation and technology in the industry can be seen as attempts to deal with these weaknesses.

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