India shining? A two-wave study of business constraints upon micro and small manufacturing firms in India

Abstract

The national marketing slogan 'India Shining' was launched in 2004 by the Indian government to showcase rapid economic growth; around the same time, a number of new policy measures to promote small businesses were introduced to help them deal with an increasingly globalised environment. This article analyses survey data collected by the World Bank from owners and managers of 1300 Indian firms in 2002 and 608 firms in 2006 respectively, to explore how prevailing business constraints limit the performance of micro (fewer than 10) and small (10 to 49 employees) manufacturing businesses in 2002 and 2006. Using capacity utilisation to measure performance, the study finds that both micro and small firms fared somewhat worse in 2006 than in 2002.