• Dr. Rajib Lahiri

Micro, Small and Medium Enterprises (MSMEs) have become a vital medium for economic development for the policy makers since independence. As the sector is highly sensitive in nature it was supported by a number of protection measures to safeguard the sector from stiff market competition. Reservation Policy introduced in 1967 is one of such policy measures under which a number of items were reserved for exclusive production/manufacture by the MSMEs. No other sectors can manufacture such reserved items unless they undertake 50 percent of export obligations of such items. This paper is a modest attempt to study the effects of Reservation Policy on the MSMEs during the pre and post liberalization and the rationale of gradual withdrawal of the policy during the post liberalization period. The period of study is from 1967 to 2015 i.e. from the year of introduction of the Reservation Policy to the year of withdrawal of the policy. The period from 1967 to 1990 has been termed as Reservation Period and the period from 1991 to 2015 as the De-Reservation Period. The study is based on secondary data collected from the Annual Reports published by the Ministry of MSMEs in different years. From 1967 to 1990 i.e. the pre-liberalisation period a significant number of items were included in the reserved list to protect the MSMEs from the imperfections in factor market, labour, capital and land. However, from 1997 onwards i.e. the post liberalization period the protection policies were replaced by promotional measures and a number of items were de-reserved to increase the competitiveness of the sector and enable the consumers to get the best quality of products at a competitive price. The policy was totally withdrawn by the Govt. in 2015 by de-reserving all the reserved items as the performance of the MSMEs during the reservation period has not been satisfactory and the policy adversely affected the manufacturing employment and export growth of the MSME sector. The Govt. is on the right direction by de-reserving a number of items in the reservation list in a phased manner and substituting the protection measures by the promotional measures.

Globalisation, Liberalisation, Micro, Small and Medium Enterprises (MSMEs), Protection, Promotion, Reservation Policy, Quantitative and qualitative Restrictions (QRs).

"Reservation Policy and its Influence on the MSMEs in India during Pre and Post Globalisation Era: A study", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 2, page no.477-480, February-2019, Available :http://www.jetir.org/papers/JETIR1902A71.pdf

"Reservation Policy and its Influence on the MSMEs in India during Pre and Post Globalisation Era: A study", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 2, page no. pp477-480, February-2019, Available at : http://www.jetir.org/papers/JETIR1902A71.pdf