Dereserve items, provide enabling policies in MSEs: Survey

New Delhi, Feb 27 (UNI) Economic Survey 2006-07 has called for an objective review of the reservation policy and putting in place appropriate enabling measures for a robust micro and small enterprise (MSE) sector.

The Survey, presented in Parliament today, says reserving items for domestic production exclusively in the small-scale sector, particularly when such products can be freely imported from large-scale production units abroad, prevents the 'small' from growing and benefitting from the economies of scale.

Thus it is necessary to see whether the reservation is based on any objective policy parameter, it adds.

As on January 22, the number of items reserved for the small-scale sector was 239.

The Survey describes the MSEs as an important segment of the Indian economy, contributing 39 per cent of the country's manufacturing output and 34 per cent of its exports in 2004-05, and employing about 29.5 million people in rural and urban areas in 2005-06.

Pointing out that the process of economic liberalisation and market reforms has opened up attractive possibilities of access to larger markets, the Survey says appropriate enabling policies should be put in place to enable the MSEs to derive the benefits of new opportunities.

''In this environment of competition and rapid technological changes, the segment can then achieve higher sustainable growth by improving its products and service quality to global standards and seeking ways of innovation.'' The Survey list the measures already taken by the government to enable MSEs enhance their competitive strength, address the challenges of competition and avail of the benfits of the global market.

These include enactment of the Micro, Small and Medium Enterprises Development Act, 2006 and the amendment to the Khadi and Village Industries Commission Act, 1956.

UNI