Steps to Attract Foreign Investment NOW, WE ARE READY TO INVEST! Small producers: Compete or perish For a large number of small producers and workers globalisation has posed major challenges. 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 ( crores) in the country, next only to agriculture. . What are the ways in which Ravi’s small production unit was affected by rising competition? .
Should producers such as Ravi stop production because their cost of production is higher compared to producers in other countries? What do you think? . 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. used to buy different components including capacitors in bulk for the manufacture of television sets.
However, competition from the MNC brands forced the Indian television companies to move into assembling activities for MNCs. Even when some of them bought capacitors, they would prefer to import as the price of the imported item was half the price charged by people like Ravi. Ravi now produces less than half the capacitors that he produced in the year and has only seven workers working for him. Many of Ravi’s friends in the same business in Hyderabad and Chennai have closed their units.
Ravi did not expect that he would have to face a crisis in such a short period of his life as industrialist. Ravi took a loan from the bank to start his own company producing capacitors in in Hosur, an industrial town in Tamil Nadu. Capacitors are used in many electronic home appliances including tube lights, television etc. Within three years, he was able to expand production and had workers working under him.
His struggle to run his company started when the government removed restrictions on imports of capacitors as per its agreement at WTO in . His main clients, the television companies,