POLICY MEASURES FOR SMALL SCALE SECTOR (SSI) IN INDIA AND THEIR RELEVANCE TO HOSIERY INDUSTRY - THE WTO IMPLICATIONS

The Small Scale Industries (SSI) sector has made substantial contribution to the economic development of India since independence. Of course the government policies have been instrumental in the promotion of this sector. But with the changes in government policy subsequent to the economic reforms in 1991 and the WTO agreements in 1995, this sector has been thrown open to increased competition within India from large units and globally from other countries. This means opportunities and challenges on a larger scale. This has compelled the SSI sector to reposition itself to compete and succeed in the global markets. This study is an attempt to trace the policy measures of the government to equip the SSI sector to compete in the new environment. The study pays special attention to the support provided to the hosiery segment in Tirupur which is one of the largest sources of foreign exchange earning in India. The study concludes that there has been a shift in the pattern of support provided to this sector. The policy measures have been fine tuned to enable this sector to stand on its own strength rather than relying on protective measures. Industry associations and other private bodies have also actively participated in enhancing the competitiveness of this sector.