Industrial Deceleration and 1998-99 Union Budget

This paper argues that while the emphasis of the budget on small-scale industries, information technology, a level playing field for the Indian firms and a greater role for non-resident Indians is correct, the actual measures introduced might turn out to be counter-productive. For reversing industrial deceleration, this paper advocates a thrust on technological change and networking for the small and medium firms. For the public sector, this paper suggests that rather than selling a majority of their stocks to private firms at the current depressed stock prices, profit-sharing schemes for workers be introduced through equity sharing. It also advocates encouragement for small and medium firms to set up micro power plants based on molasses, wind and solar energy. To make the stock market more broad-based, remove possible malpractices and increase the small investor's confidence, this paper favours the introduction of compulsory depository system in addition to stock option for workers.