SMEs and the Informal Sector

“SMEs and the Informal Sector in the Emerging Market Economy of India”


The development of SMEs in any part is indispensable. Corporate and single attempts in this way will travel a long manner in cut downing regional and domestic income inequalities, accomplishing Pareto betterment, equity and justness, in making a balance of income and employment and in achieving rapid economic growing in income and end product. To accomplish this, there is a demand to better SMEs international fight through SME publicity policies, protective duties, betterment of quality and accomplishment through R & A ; D, larning by making theoretical accounts and economic systems of graduated table. This paper will analyse the causes of the outgrowth of the informal sector, the desirableness of the informal sector for achieving full employment in a labour abundant economic system like India, examine why the SMEs have been accepted as the engine of economic growing and for advancing just development in the Indian context and infer with the aid of certain propositions made in a constructed general equilibrium theoretical account ( based on multiple cross effects ) the likely effects on societal public assistance, the informal sector and duty protected SMEs in the aftermath of globalisation.


A major focal point of development theory in South Asia has been on the Manichaean nature of developing states ‘ ( like India, Bangladesh, Pakistan, and Sri Lanka ) national economic systems – the being of a modern urban capitalist big graduated table sector geared towards capital-intensive, big graduated table production and a traditional labour intensive sector geared towards little graduated table and medium graduated table production ( SMEs ) . The coexistence of the formal sector and the informal sector leads to the creative activity of double economic systems. Informal markets should non be equated with poorness, development, or marginalisation each of which describes a status ; instead informal markets are a procedure that can bring forth high incomes, promote entrepreneurship and do significant part to an economic systems ‘ entire end product and people ‘s public assistance. Emergence of an informal sector in any economic system possibly a consequence of a host of factors. Prominent among them is the rent hedging behavior statement harmonizing to which consumers and providers who are pushed out of a restricted market result by the higher monetary value and licensing demand, severally, effort to prosecute in reciprocally good minutess through an informal market.

Now, we focus on the little and average endeavors ( SMEs ) in the South Asiatic context. SMEs typically consist of: export-oriented industries like dress, back uping industries like car constituents and traditional bungalow industries like handcrafts services. One of the specifying features of a comfortable and turning economic system is a booming little and average endeavor ( SME ) sector. SMEs contribute to economic development in multiple ways, making employment for spread outing rural and urban work force and supplying much needed flexibleness and invention in the economic system as a whole. Their ability to diversify economic activity makes a important part to exports and alleviates poorness. It is estimated that the SMEs contribute half of Bangladesh ‘s industrial GDP and supply employment to about five million individuals, or 82 per cent of the entire industrial sector employment. In Pakistan SMEs contribute about 30 per cent of GDP. In Nepal, SMEs constitute more than 98 per cent of all constitutions covered by nose counts, and lend 63 per cent of the value added. More than 80 per cent of the national value add-on in the fabrication sector comes from the SME sector.

In India the SMEs play a polar function in the overall industrial economic system of the state. It is estimated that in footings of value, the sector histories for approximately 39 % of the fabrication end product and around 33 % of the entire export of the state. Further, in recent old ages the SME sector has systematically registered higher growing rate compared to the overall industrial sector. The major advantage of the sector is its employment potency at low capital cost. As per available statistics, this sector employs an estimated 31 million individuals spread over 12.8 million endeavors and the labour strength in the SME sector is estimated to be about 4 times higher than the big endeavors. Section 1 of the paper presents a brief literature reappraisal concentrating on the impact of SMEs on production, employment and export public presentation in India in the last decennary. Section 2 of the paper deals with a instance survey ; a public presentation analysis of SMEs from major parts of Maharashtra, a province in India, covering the undermentioned sectors: Technology ; Electricals ; Food Processing ; Chemicals and Pharmaceuticals. In Section 3 of the paper I have constructed a general equilibrium theoretical account comprising of three sectors – big industry, average graduated table industry and informal sector ( say, agribusiness ) in a little unfastened economic system ( India ) . Certain comparative inactive exercisings have yielded interesting consequences. An addition in universe demand for the export-oriented big industry, on one manus, consequences in an enlargement of the informal sector and, on the other manus, leads to a contraction of the import viing little endeavor. Duty liberalisation helps in bridging the pay spread between the organized sector and the unorganised informal sector to a certain extent. Section 4 concludes the paper. The mathematical appendix and the mentions follow.


In this literature reappraisal, we will specifically analyse the impact of SMEs in three domains ; production, employment and exports.

A. Production

The small-scale industries sector plays a critical function in the growing of the state. It contributes about 40 % of the gross industrial value added in the Indian economic system. It has been estimated that a million rupees of investing in fixed assets in the small-scale sector produces 4.62 million worth of goods or services. The small-scale sector has grown quickly over the old ages. The growing rates during the assorted program periods have been really impressive. The figure of small-scale units has increased from an estimated 0.87 million units in the twelvemonth 1980-81 to over 3 million in the twelvemonth 2000. When the public presentation of this sector is viewed against the growing in the fabrication and the industry sector as a whole, it instils assurance in the resiliency of the small-scale sector.































2000-01 ( P )



P-Projected ( April-December )

* Target non fixed at changeless monetary values

B. Employment

SMEs in India create 2nd largest employment chances for the Indian population, following merely to Agriculture. It has been estimated that 100,000 rupees of investing in fixed assets in the small-scale sector generates employment for four individuals on an norm.

Coevals of Employment – Industry Group-wise

Food merchandises industry has ranked foremost in bring forthing employment, supplying employment to 0.48 million individuals ( 13.1 % ) . The following two industry groups were Non-metallic mineral merchandises with employment of 0.45 million individuals ( 12.2 % ) and Metal merchandises with 0.37 million individuals ( 10.2 % ) . In Chemicals & A ; chemical merchandises, Machinery parts except Electrical parts, Wood merchandises, Basic Metal Industries, Paper merchandises & A ; printing, Hosiery & A ; garments, Repair services and Rubber & A ; plastic merchandises, the part ranged from 9 % to 5 % , the entire part by these eight industry groups being 49 % . In all other industries the part was less than 5 % .

Per unit employment

Per unit employment was the highest ( 20 ) in units engaged in drinks, baccy & A ; baccy merchandises chiefly due to the high employment potency of this industry peculiarly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu. Following came Cotton fabric merchandises ( 17 ) , Non-metallic mineral merchandises ( 14.1 ) , Basic metal industries ( 13.6 ) and Electrical machinery and parts ( 11.2. ) The lowest of 2.4 was in Repair services line. Per unit employment was the highest ( 10 ) in urban countries and lowest ( 5 ) in rural countries. However, in Chemicals & A ; chemical merchandises, Non-metallic mineral merchandises and Basic metal industries per unit employment was higher in rural countries as compared to metropolitan areas/urban countries.

Location-wise Employment Distribution:


Non- metallic merchandises contributed 22.7 % to employment generated in rural countries. Food Merchandises accounted for 21.1 % , Wood Products and Chemicals and chemical merchandises shared between them 17.5 % .


As for urban countries, Food Products and Metal Products about every bit shared 22.8 % of employment. Machinery parts except electrical, Non-metallic mineral merchandises, and Chemicals & A ; chemical merchandises between them accounted for 26.2 % of employment. In metropolitan countries the taking industries were Metal merchandises, Machinery and parts except electrical and Paper merchandises & A ; printing ( entire portion being 33.6 % ) .

State-wise Employment Distribution

Tamil Nadu ( 14.5 % ) made the maximal part to employment. This was followed by Maharashtra ( 9.7 % ) , Uttar Pradesh ( 9.5 % ) and West Bengal ( 8.5 % ) the entire portion being 27.7 % . Gujarat ( 7.6 % ) , Andhra Pradesh ( 7.5 % ) , Karnataka ( 6.7 % ) and Punjab ( 5.6 % ) together accounted for another 27.4 % . Per unit employment was high – 17, 16 and 14 severally – in Nagaland, Sikkim and Dadra & A ; Nagar Haveli. It was 12 in Maharashtra, Tripura and Delhi. Madhya Pradesh had the lowest of 2. In all other instances it was around the norm of 6.



( lakh nos. )


( lakh nos. )































P-Projected ( April-December )


SMEs plays a major function in India ‘s present export public presentation. 45 % -50 % of the Indian Exports is contributed by SMEs. Direct exports from the SMEs history for about 35 % of entire exports. Besides direct exports, it is estimated that small-scale industrial units contribute about 15 % to exports indirectly. This takes topographic point through merchandiser exporters, trading houses and export houses. They may besides be in the signifier of export orders from big units or the production of parts and constituents for usage for finished exportable goods.

It would surprise many to cognize that non-traditional merchandises account for more than 95 % of the SMEs exports. The exports from SMEs have been timing first-class growing rates in this decennary. It has been largely fuelled by the public presentation of garments, leather and treasures and jewellery units from this sector. The merchandise groups where the SMEs dominate in exports, are athleticss goods, readymade garments, woollen garments and knitwear, plastic merchandises, processed nutrient and leather merchandises.


Exports ( Rs. Crores ) ( at current monetary values )


29,068 ( 14.86 )


36,470 ( 25.50 )


39,249 ( 7.61 )


43946 ( 11.97 )


48979 ( 10.2 )

1999-00 ( P )

53975 ( 10.2 )

Section II

In India, SMEs have been established in about all-major sectors in the Indian industry such as:

§ Food Processing

§ Agricultural Inputs

§ Chemicals & A ; Pharmaceuticals

§ Engineering ; Electricals ; Electronicss

§ Electro-medical equipment

§ Fabrics and Garments

§ Leather and leather goods

§ Meat merchandises

§ Bio-engineering

§ Sports goods

§ Plastics merchandises

§ Computer Software

As a consequence of the recent planetary economic crisis, some Indian SMEs have been go throughing through a transitional period. However, those SMEs which have a strong technological base, an international concern mentality coupled with a competitory spirit and willingness to reconstitute themselves shall defy the present challenges and come out with winging colourss to do their ain part to the Indian economic system. I shall now discourse the salient characteristics of some of the SMEs in the province of Maharashtra, India which has contributed significantly to domestic production, employment and exports. Since its origin in May 1960, Maharashtra has ever been in the head of industrialisation. The province has ever followed friendly progressive industrial policies Through a web of District Industries Centre ( DICs ) , it offers maximal counsel and aid to SMEs. Many SMEs promoted by local enterprisers as besides by NRIs and aliens have come up in Maharashtra covering a wide spectrum of industrial activity. The five major types of SMEs booming in Maharashtra are Engineering ; Electricals ; Food Processing ; Chemicals and Pharmaceuticals.

The most of import parts where they are located include Western Maharashtra ( Pune, Kolhapur, Satara, Nasik etc. ) ; Konkan Region ( Ratnagiri, Sawantwadi, Kudal ) ; Marathwada ( Aurangabad, Nanded, Latur, Beed ) ; Vidharbha ( Nagpur, Amaravati ) ; Greater Mumbai ( Mumbai, Thane, Belapur ) .

A. Electrical Industry

The Indian Electrical Industry has a history of more than 100 old ages progressing through proficient coactions, joint ventures autochthonal research and development. Today, the industry has a capacity of fabricating most of the equipment. The industry mostly depends on the power programme, industrial demands, urban and rural demand. Maharashtra enjoys a competitory advantage in electrical sector viz. electrical place contraptions, electrical motors, transformers, industrial equipment, switch-gears, circuit surfs, pollution control equipment, Power Capacitors, illuming fixtures and lamps, etc.

In Maharashtra, the electrical industry will go on to stay a big and important industry section providing to critical demands of industry & A ; household.6 [ 1 ] Maharashtra and Gujarat will go on to rule this industry with more than half the state ‘s end product and value add-on.

B. Technology Industry

The technology industry has catapulted many states like Japan, Germany, USA, UK into frontline industrial states within a really short clip. India excessively has found this industry really antiphonal and eager to take up any stimulation to growing. Importance of technology industry in India can be gauged from the fact that it employs over 3 million people in the state. Maharashtra occupies an of import topographic point in both production every bit good as exports of technology goods from the state. Engineering industry in the province is extremely diversified and produces a big scope of parts from industrial machinery to industrial castings and hammering. The province has a reasonably big figure of houses in the organized sector possessing universe category fabrication capablenesss and cost constructions, besides a huge figure of little and average technology houses. [ 2 ] The industry, which was ab initio concentrated in the Mumbai-Pune belt, has spread all over, the State, the major production centres being Nagpur, Aurangabad, Nasik, and Kolhapur. [ 3 ]

Entire exports from the technology industry in Maharashtra in 1996-97 have been estimated at US $ 900 million. This histories for over 21 per cent of entire export of technology merchandises in the same twelvemonth. The major viing states for most of the technology merchandises exported from the province are Japan, South Korea, Taiwan and China besides West European and North American states. In overall footings, the export mentality for technology merchandises is bright. Maharashtra and Gujarat will go on to rule this industry with more than half the state ‘s end product and value add-on.

C. FOOD Processing Industry

The nutrient industry contributes about 18 % of India?s fabrication end product and around 5 % of entire industrial investing. Both in footings of foreign investing and figure of joint ventures / foreign coactions, the consumer nutrient section has top precedence. Maharashtra has been one of the major manufacturers of fruits and veggies, milk and meat merchandises. Maharashtra has 10 to 15 % production portion of agro green goods related to processed industry. Major units in Maharashtra are fruit and veggies, bakeshop merchandises dairy merchandise, cereals, meat and merchandises among others. Maharashtra and Gujarat will go on to rule this industry with more than half the nation?s end product and value add-on. [ 4 ]


It may be seen that the Indian Pharmaceutical Industry has been turning at a healthy 16.7 per cent per annum over the last one decennary. India is able to run into over 70 per cent of its demand of majority drugs and 95 per cent of preparations. Exports of drugs and pharmaceuticals from the state are lifting really fast. They have increased from Rs. 2256.6 crores in 1994-95 to Rs. 3177.7 crores in 1995-96 to enter Rs. 4090.3 crores in 1996-97, registering an impressive one-year growing rate of 34.4 per cent. Maharashtra is a major centre for both production every bit good as exports of basic drugs and pharmaceuticals in the state. [ 5 ] The province histories for about 40 per centum of all India production of majority drugs and preparations and its portion in all India exports of it, is about 33 per centum. Maharashtra and Gujarat will go on to rule this industry with more than half the state ‘s end product and value add-on.


Maharashtra enjoys a competitory advantage in certain chemicals industries viz. Agro Chemicals, Fertilizes, Pesticides, Pharmaceuticals, Dyes, Plastic Processing specially chemicals and pigments. In Maharashtra chemical industry will go on to stay a big and a important industry section providing to critical demands of agribusiness, family ingestion, industrial utilizations and other strategic and defence demands. This means that chemicals are inevitable in many respects, but at the same clip chemicals are risky besides in many respects. Here excessively, Maharashtra and Gujarat will go on to rule this industry with more than half the state ‘s end product and value add-on. [ 6 ] Therefore to reason, the quality of merchandises of SMEs from Maharashtra is high. Some of them have acquired engineering from abroad. Adequate budget is provided for R & A ; D operations. This has helped the SMEs in Maharashtra to lend significantly to domestic production, employment and exports.

Section III


We construct a three-sector general equilibrium theoretical account of a little unfastened economic system [ 7 ] to analyse the deductions of increased universe demand for the merchandises of big graduated table industries and tariff liberalisation of the import-competing SME in the aftermath of globalisation. Since the focal point of the paper is on industrial sector, we disaggregate this sector into three sub-sectors viz. , X, Y, and M.

Sector X is an export oriented large-scale industry. It uses labour, foreign capital [ 8 ] and intermediate input from the informal sector. Wage of labour in both the organized sectors X and Y is nonionized and therefore fixed. Sector Y is an import viing SME and we assume that it is protected by an ad-valorem duty on imports [ 9 ] . ( Note: Though I have shown that SMEs contribute significantly to exports in India, here I perceive the creative activity of SMEs for import permutation intents as a thought experiment. ) This sector uses labour, domestic capital and intermediate inputs from the informal sector. Wage of labour is fixed. Sector M is the non-traded informal sector utilizing labour and domestic capital. However, the rewards here are flexible as we assume any excess labour from the organized sector, X and Y will be absorbed by the informal sector. Thus full employment prevails in the economic system. Foreign capital and domestic capital are two independent classs of capital and they earn different rates of return. This is one facet of factor market cleavage. Thus this theoretical account differs from the conventional Harris-Todaro theoretical account Besides, we consider import viing formal sector Y to be comparatively more capital intensive as compared to informal sector M.


: pay of labour in the organized sector ( fixed )

tungsten: flexible pay of labour used in informal sector

? sixty: the co-efficient of labour for sector X i.e. labor/unit of ten

? ly: the co-efficient of labour for sector Y i.e. labor/unit of Y

? k1 ten: the co-efficient of foreign capital in X i.e. foreign capital /unit of ten

ak 2 Ys


the co-efficient of domestic capital in Y i.e. domestic capital/unit of Y

ak 2 m


the co-efficient of domestic capital in M i.e. domestic capital/unit of m



the co-efficient of intermediate input in X i.e. intermediate input/ unit of ten

a my


the co-efficient of intermediate input in Y i.e. intermediate input/ unit of Y



return on foreign capital



return on domestic capital



entire supply of labour


entire supply of foreign capital


entire supply of domestic capital


We assume that markets are competitory and monetary value charged for the merchandise peers mean cost of production. For interest of simpleness, we assume that the factor coefficients are fixed. The theoretical account is represented by the undermentioned equations.

Monetary value System:

P * = Washington

+ Ra

+ P a

( 1 )




k1 ten

m maxwell

P* ( 1+t )



+ r a

+ P a

( 2 )




K2 Y



P = Washington

+ r a

( 3 )




K 2 m

Measure System:

L = alx x +aly y +almm

( 4 )


= ak2 Y Y +ak2 millimeter

( 5 )

M ( Pm ) = amyY

( 6 )

[ ¶M & gt ; 0 ]



ten = K ( r – r* )

( 7 )

k1 ten

1 1

Equation ( 1 ) , ( 2 ) and ( 3 ) represent nothing net income status for sector X, Y and M. This follows from the premise of competitory markets. Equation ( 4 ) , ( 5 ) and ( 7 ) merely represent full employment of labour, domestic capital, and foreign capital severally. Equation ( 6 ) shows equality between supply and demand maps of the informal sector, at equilibrium [ 10 ] .


We start with a peculiar value of Pm. Since monetary values Px* and Py* are given for a little unfastened economic system, equations ( 1 ) and ( 2 ) determine r1 and r2 severally. Once we know r2, from equation ( 3 ) , we can find the flexible pay rate tungsten in the informal sector. After finding the value of r1, from equation ( 7 ) , we determine end product of sector X. Now, work outing equations ( 4 ) and ( 5 ) at the same time will give us end product of sector Y and M. Finally, with the aid of equation ( 6 ) , we determine the value of Pm which is really endogenous.

Comparative Statics:

A ) Increased universe demand for the merchandise of the export-oriented sector, i.e. Ten

We consider an addition in the universe demand for industrial merchandise X in an emerging market economic system in general and India in peculiar as indicated by an addition in Px* . In this three-sector general equilibrium theoretical account, we will demo that this entails a rise in informal pay and contraction of duty protected import viing construction. The economic reading is as follows. Rise in the international monetary value of X leads to an addition in return to foreign capital earned in the place state, which follows from equation ( 1 ) . This induces greater influx of foreign capital by the manner of FDI. Since foreign capital is specific to X, this leads to the enlargement of large-scale industry. Now, sector X uses an intermediate input produced by M. The greater demand for this intermediate input leads to increase in the monetary value of the merchandise produced by the informal sector. Thus M expands. This is in conformance with the recent tendencies in the station globalisation epoch. However, informal sector uses domestic capital along with another formal industrial sector Y which nevertheless is import viing. It follows from equation ( 5 ) that sector Y contracts. Since informal sector is labour intensive compared to the medium-scale industry, the Stolper-Samuelson theorem explains why informal pay goes up while the return on domestic capital diminutions.

Proposition: “Increased universe demand for export oriented merchandise X will take to enlargement of the informal sector and contraction of the SME. Engage spread between the organized and informal sector decreases.” [ 11 ]

B ) Duty Liberalization

As observed earlier, the import viing SME is tariff protected. Industrial public presentation is ne’er independent of trade policy. More specifically, an industrialisation scheme requires an incorporate policy model to take advantage of the benefits that globalisation can offer to an emerging market economic system. We incorporate the facet of duty liberalisation in our theoretical account through a decrease of duty ( that is we consider the effects of a autumn in ‘t ‘ ) . From equation ( 2 ) , a autumn in‘t ‘ will take to fall in r2, ceteris paribus. This in bend will do an addition in tungsten, the flexible pay rate in the informal sector through equation ( 3 ) . Therefore if we assume that ab initio w is greater tungsten, so the policy of duty liberalisation helps to bridge the spread between organized and unorganised informal sector to some extent.

Proposition: Duty liberalisation causes a autumn in the flexible pay rate of the informal sector, which has favourable deductions for seeking to convey about equality among the working categories.


To reason, SMEs represent the theoretical account of socio-economic policies of Government of India which focuses on wise usage of foreign exchange for import of capital goods and inputs ; labour intensive manner of production ; employment coevals ; non-concentration of diffusion of economic power in the custodies of few ( as in the instance of large houses ) ; detering monopolistic patterns of production and selling ; and eventually effectual part to foreign exchange earning of the state with low import-intensive operations. It was besides coupled with the policy of de-concentration of industrial activities in few geographical centres. It can be observed that by and big, SMEs in India have met the outlooks of the authorities in this regard.

By and big, we can state that the SMEs in India have been more or less successful in achieving the undermentioned aims:

§ High part to domestic production

§ Significant export net incomes

§ Low investing demands

§ Operational flexibleness

§ Location wise mobility

§ Low intensive imports

§ Capacities to develop appropriate autochthonal engineering

§ Import permutation

§ Technology – oriented industries

§ Competitiveness in domestic and export markets

At the same clip one can non disregard some of the restrictions of SMEs which include:

§ Low Capital base

§ Concentration of maps in one / two individuals

§ Inadequate exposure to international environment

§ Inability to confront impact of WTO government

§ Inadequate part towards R & A ; D

§ Lack of professionalism

Harmonizing to the World Labor Report 1997, published by the International Labour Organization ( ILO ) , the growing of SMEs and the informal sector is sometimes retarded as “ In South Asia, the legalistic tradition is less developed and therefore less suppressing to collective bargaining but the mechanisms which facilitate societal duologue are on the whole, still under-developed ” .

However, being an optimist by nature, in malice of the many restrictions of SMEs, I would wish to stop this treatment on a positive note by stressing one time once more that one of the most of import necessities of a comfortable and turning emerging market economic system like India is a booming little and average endeavor ( SME ) sector. SMEs contribute to economic and societal development in multiple ways, making employment for spread outing rural and urban work force and supplying the much needed flexibleness and invention in the economic system as a whole. Their ability to diversify economic activity makes a important part to exports and alleviates poorness. Their import permutation abilities help in conveying about a favourable impact on the balance of payments ( BOP ) state of affairs of a state. These endeavors can in future provide a strong foundation for the growing of new industries every bit good as strengthen the bing 1s by bring forthing suited backward and forward linkages. We can trust that in the close hereafter, farther development of a group of diverse and competitory SMEs would take to the way to sustainable economic growing non merely in India but besides in South Asia as a whole.


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[ 1 ] 6According to industry reappraisal of Indian Electrical Equipment Manufacturers Association ( IEEMA )

[ 2 ] Some of the major houses are SBEM Pvt. Ltd. Pune, Atul Electro Formers Pvt. Ltd. , Pune, Hylo Transmissions Pvt. Ltd. , Pune, Kam-Avida Enviro Engineers Pvt. Ltd. , Pune, Legend Communications Pvt. Ltd. , Pune and Mahavir Group of Industries, Pune.

[ 3 ] The major technology points of production and exports in Maharashtra are textile mill machinery, machinery for sugar, cement, and chemical workss, nutrient processing machinery, building machinery, tractors for agribusiness intents, transmittal line towers and accoutrements, fabricated steel like cargo containers, steel forging, steel castings, bright steel bars, unstained steel merchandise, car parts, cutting tools and files, machine tools, mechanical pumps among others.

[ 4 ] Some notable houses are Sairaja Fruit & A ; Food Processing Pvt. Ltd, Phaltan ; Gadre Marine Products, Ratnagiri ; Aditi Pectins Private Limited, Islampur, Dist. Sangli ; and Sushant Bio-Pharmaceuticals Pvt. Ltd. , Kolhapur

[ 5 ] Some outstanding pharmaceutical houses in Maharashtra are Verma Pharmacy Pvt. Ltd. , Pune ; Kevera Herbals ( I ) Pvt.Ltd. , Pune ; Nu-Life Pharmaceuticals, Pune ; Milan laboratories ( I ) , Thane ; and Li-taka Pharmaceuticals Ltd. , Pune

[ 6 ] Some outstanding Maharashtrian houses in the chemical industry include Rathi Dye Chem Ltd. , Pune ; Everest Flavours Ltd. , Mumbai ; Ajay Metachem Ltd. , Pune ; Iftex Oil & A ; Chemicals Lt. , Mumbai ; and Suparna Chemicals Ltd. , Mumbai.

[ 7 ] We conceive India as a little unfastened economic system.

[ 8 ] Emperical groundss suggest that traditionally foreign capital is attracted more to sectors unfastened to exports.

[ 9 ] In conformity with the baby industry statement for import permutation.

[ 10 ] Stability in the system is ensured as in the presence of any extra demand, i.e. if amy y – M ( Pm ) is positive so Pm rises and extra demand is eliminated.

[ 11 ] See mathematical appendix.