CONTENTS Preface 1.The Global Economic Outlook 2008 01 Introduction 01 The Global Economic Crisis of 2008 02 Global Outlook for the MSME Sector 11 Strategies for SME Promotion 14 Conclusion 42 2.Indian Economy: The State and Recent Currents 43 Introduction 43 The Macro Economic Developments 43 Some Critical Issues and the Way Forward 54 Conclusion 55 3 The Enterprise Eco-System in India 56 Introduction 56 Conceptual Frame Work 56 The Indian Scene 57 Recent Evidences 66 Enterprise Demography 77 Conclusion 82 4.Development Programmes and Strategies 83 Introduction 83 Individual Efficiency Approach 83 Collective Efficiency Approach 87 General Programmes 92 Sub-Sectoral Programmes 93 National Manufacturing Competitiveness Programme 95 Conclusion 101 5. The Progress Card 102 Introduction 102 Policy Milestones 102 Institutional Framework 109 Pillars of Public Policy 110 Performance of Non-farm Sector 120 Technology 122 Capital-starved Tiny Units 123 Labour Productivity 123 Industrial Health 125 Growth Performance 126 Export Performance 126 Employment 130 Regional Development 133 Conclusion 133 6. Globalization and Local Economic Development 134 Introduction 134 Economic Reforms and Trade 134 Outward Orientation of Indian SMEs 135 New Economy Opportunities 140 FDI and the MSMEs: Opportunities and Threats 148 Retail Sector in India 150 Local Imperatives: Local Economic Development 153 The Search for Innovative Models 157 Local Economic Development: The New Relevance 159 Conclusion160 7. Financial Inclusion and Beyond161 Introduction 161 The Regulatory System 161 Credit Delivery System 163 Forms of Credit Support 164 Trend in Credit Flow 165 The Process of Financial Exclusion' and the Response 172 Recessionary Trend and Recent Developments in SME Lending 180 Role of Dedicated Funds 185 Conclusion 189 8.From SME Agenda to 'Responsible Business Agenda' 190 Introduction 190 The Objective Setting190 SME Agenda: The Variants191 The Historical Specificity and Complementarity 195 Streams of Responsible Business Agenda in India196 Key Issues for Debate 198 Key Issues and their Practical Implications206 9- The Making of an Economic Crisis208 Introduction208 India: Walking Towards Recession? 209 The Impacts: Visible and the Invisible211 Causes of the Crisis 214 Major Findings of the ISED Study Group 216 Fighting Recession: The Strategy Options 232 Conclusion236 10.The Way Forward 237 Introduction 237 Macro Perspectives and Strategies 237 Actors and their Role 240 Advocacy 244 Prospects and Outlook 244 Conclusion 248 Selected Bibliography 249 Abbreviations &: Acronyms 252