Economic Reform and Industrial Sickness in Indian Small Scale Sector

Amanat Bhullar and Parminder Singh
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Amanat Bhullar: Guru Nanak Dev University, Amritsar, India
Parminder Singh: Guru Nanak Dev University, Amritsar, India

International Journal of Business and Administrative Studies, 2016, vol. 2, issue 6, 179-193

Abstract: The major thrust of the present paper is to examine the working capital gap in the Indian Small Scale Industrial Sector during the period (1980-81 to 2011-12) further divided into two that is pre reform period (1980-81 to 1990-91) and post reform period (1991-91 to 2011-12). For the purpose of the study the data have been curled from Handbook of Statistics on Indian Economy, RBI and various reports. The paper is isolated into three sections; first section talks about the definition and magnitude of sickness in Indian Small Scale Industrial Sector. Second section estimates the Working Capital Gap (WCG) for the entire period (1980-81 to 2011-12) as well as pre reform period (1980-81 to 1990-91) and post reform period (1991-92 to 2011-12). It is revealed from the data presented in the table that the main cause of sickness is the lack of working capital and finance of the Small Scale Industrial Sector of India. The rise of small scale units has remained unabated even after the formulation of various new financial institutions which comprise of banking and non-banking institutes. It has been noted that the organization has failed to render the desired financial services for the small scale industries to meet the challenges of globalization. Therefore what is required is close cooperation of industries, government and financial institutes to refurbish the haleness of sick units and to lessen the dependence of small units on borrowed money.

Keywords: Small Scale Industrial Sector; Globalization; Working Capital Gap (WCG); Financial Institution; Sickness (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:apa:ijbaas:2016:p:179-193

DOI: 10.20469/ijbas.2.10003-6

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