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Article: Directed credit and investment in small-scale industry in India: evidence from firm-level data 1965-78.
- Article from:
- Journal of Development Studies
- Article date:
- April 1, 1999
- Author:
CopyrightCOPYRIGHT 1999 Frank Cass & Company Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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1. INTRODUCTION
The promotion of small-scale industry has been a consistent theme of post-independence Indian planning. While various protectionist measures and fiscal concessions had been put in place in the 1950s, it was not until the late 1960s that planners began to use directed credit as a tool of policy. A series of policies introduced from 1967 onwards, and facilitated by the nationalisation of most of the commercial banks in 1969, demanded sharp increases in the share of bank lending going to designated 'priority' sectors, of which the most important were agriculture and small-scale industry. The assumption behind the policy was that the rise in bank ...