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Small producers: Compete or perish For a large number of small producers and workers globalisation has posed major challenges. R is ing C om pe tit ion Ravi did not expect thathe wo uld have used to buy d toface a crisis insuch a short peiod ifferent co mp one nts ofhis lfe as industrialit. Ravi took includ ing capacitors in bu lk for the oa n from the bank a m anuf actu re of television s ets. com to tart his ow n H owev er, compet itin f p any produ cingcapac itorsin 1992 brand s for rom the M NC in H osur,a n n dustrial twn in Tam il ced t he Indian teev sion Na d u.C ap actors a re used in compa nies to mo ve into asse mb ing electronic hom man y activies for MNC s. Even w hen som e ap pliances includng of them boug ht cpac e tube lih t, tlevisin etc. Within three prefer tors,they w ould ye ars, he w a s able to expan d to import as the price of the pro duc ion a nd h ad 2 import ed item w as ha f the price w orkn gu nder 0 w orker s charged by people lke R avi. him. His srug gletorun Ravi now produces less than ha lfth w his cmpan y started capa citorsthathe produ e hen the g overnm ent rem oved 200 0 and cedin the year resticions on im portsof capacitos as has only se ven w orke rs peritsa greeme ntat W TO in work ing fr him.Many ofR avi’sfiends m ain clents, 2001. His in the sam e bu siness in H ydera h etelevision cmpan ies, and Chen nai have c bad losed theirunits. Batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil are some examples of industries where the small manufacturers have been hit hard due to competition. Several of the units have shut down rendering many workers jobless. The small and medium industries in India employ the largest number of workers (11 crores) in the country, next only to agriculture. LET’S WORK THESE OUT 1. What are the ways in which Ravi’s small production unit was affected by rising competition? 2. Should producers such as Ravi stop production because their cost of production is higher compared to producers in other countries? What do you think? 3. 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. l Can you explain how these three things would help Indian producers? l Do you think MNCs will be interested in investing in these? Why? l Do you think the government has a role in making these facilities available? Why? l Can you think of any other step that the government could take? Discuss. 68 U NDERST ANDING E CONOMIC D EVEL OPMENT Reprint 2026-27