Question

Long answer type questions.

Explain features of New small enterprise policy 1991.

Answer 1

New Small Enterprise Policy was launched by the government in 1991 to provide vitality and the required inputs to the small business houses. This policy was taken up as a part of the liberalisation process in the country, in 1990. This process aimed at opening up the country’s industries and market to foreign competition so as to increase domestic efficiency. The New Small Enterprise Policy was primarily formulated for benefiting the small and village industries. Following are some of the main features of this policy:

1. The policy removed all the restrictions on small-scale industries.
2. It helped in widening the base and scope of small-scale industries and related services.
3. It made provisions for technical assistance and other advisory services in case of small units.
4. It also enlarged the National Equity Fund Scheme along with the single window scheme.
5. It raised the investment limit for tiny units from Rs. 2 lacs to Rs. 5 lacs.
6. It introduced restricted partnership in which the liability of at least one partner is unlimited.
7. It promoted collaboration of big and small units.
8. It encouraged big industries to invest in the small sector units.
9. It promoted public sector institutions to undertake the market promotion of small scale industries.
10. It proposed that the tiny units should be given preference in government purchases.