Reservation for small-scale industry
Also called: SSI reservation, Reservation of products for small-scale industries, Small-scale reservation · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Class 11, Ch 2 "Indian Economy 1950-1990"; Class 11, Ch 3 "Liberalisation, Privatisation and Globalisation: An Appraisal"
Meaning
Reservation for small-scale industry meant that certain goods could be made only by small-scale units. Large firms were barred from making them. The idea was that small units, which create many jobs, could not compete with big firms and needed protection. The test for reserving an item was whether small units were able to make it.
Example
Reservation began in 1967 and peaked at 873 items in 1984. The Abid Hussain Committee (1997) urged dereservation. Items were removed step by step after 1991, and the list was fully abolished in 2015.
Don't confuse with
- Public sector reservation: this kept industries for state enterprises, not for small units.
- Priority-sector lending: this protects small firms through credit. Banks must give a share of their loans to micro and small enterprises. It does not restrict what large firms may produce.
Related concepts
- Small-scale industry
- Cottage industry
- Industrial estate
- Ancillary unit
- Micro, small and medium enterprises
- MSME classification