Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials, marketing and information network (b) improvements and modernisation of technology (c) timely availability of credit at reasonable interest rates.
Can you explain how these three things would help Indian producers?
These three things would help Indian producers in the following ways: Better roads, power, water, raw materials, marketing and information network would reduce production costs and improve efficiency in operations. Improvements and modernisation of technology would enable small producers to compete with global competitors, as rapid improvement in technology has been a major factor stimulating the globalisation process. Timely availability of credit at reasonable interest rates would allow small producers to invest in their businesses and expand production, helping them survive against rising competition.
Do you think MNCs will be interested in investing in these? Why?
MNCs are unlikely to be interested in investing in these facilities for small producers. MNCs are primarily profit-driven organisations and may not see direct financial returns from investing in basic infrastructure for small producers. They would be more interested in investments that directly benefit their own operations and profits rather than supporting small-scale industries that may even be their competitors.
Do you think the government has a role in making these facilities available? Why?
Yes, the government has a significant role in making these facilities available. After Independence, the Indian government had put barriers to foreign trade and foreign investment to protect producers within the country from foreign competition. Since small and medium industries employ the largest number of workers (11 crores) next only to agriculture, the government has a responsibility to support this crucial sector. Government intervention is necessary to ensure these producers survive.
Can you think of any other step that the government could take? Discuss.
The government could provide protection to domestic producers through various means, similar to what all developed countries did during their early stages of development. It could implement policies that ensure fair competition and prevent small producers from being wiped out due to competition from imports. Since several units have already shut down rendering many workers jobless in industries like batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil, the government needs to take proactive measures to protect employment in this vital sector.
Explanation
This question addresses the challenges faced by small producers due to globalisation and competition. The textbook context highlights that small producers have been hit hard by competition, with many units shutting down. The three requirements mentioned are essential for their survival. The government's role is emphasised through historical context - it had earlier protected domestic producers through trade barriers. MNCs typically invest where they see profit, not in supporting small competitors. The reference to developed countries providing protection during early development stages suggests similar measures could help Indian small producers.