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

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Risk Capital for Medium and Small Industries-Weaknesses in Fiscal and Monetary Policies

The author traces the paucity of risk capital for small and medium industries to certain fundamental weaknesses of the government's fiscal and, to some extent, monetary policies. Principally, the severe resource crunch facing the government has led it to offer extravagant fiscal concessions on investments which are totally risk-free. The structure of effective interest rates and yield on investments has in the process been so distorted as to render the small and medium private enterprises' task of garnering risk capital extremely onerous.

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