SMALL ENTERPRISES 37 industrial establishments can be broadly classified into (1) those which are consumed directly; (2) those that are used in the manufacture of other articles (intermediate goods); and (3) the capital goods on which all these articles are manufactured. It is one of the laws of the development of economy that the market for intermediate goods and capital goods must increase at a faster rate than the market for consumer goods.13 To generate a fast growing market for capital goods and intermediate goods, it was necessary for the planners to encourage a process of capital accumulation, leading to differentiation among the huge mass of self-employed persons. Under the laws of capitalist competition, a small minority of these self-employed persons was to be expected to develop into a stratum of relatively small industrial entrepreneurs. The large majority would inevitably lose the little property they held, and enter the work force as wage workers. Processes in the agricultural sector similar to that of differentiation of the self-employed industrial workers described above were expected to take place simultaneously.14 Thus, both the sociopolitical imperative of the development of a small industrial capitalist stratum, and the economic imperative of the encouragement of small industrial enterprises pointed to the need for a set of official policy measures and institutions which would aid these processes. Both these requirements of capitalist economic development flowed out of the condition of the Indian economy at time. What is of interest in the Indian case, however, is that these requirements could be skillfully matched to the popular support for small industrialists and small enterprises which had been generated by democratic currents within the Congress itself in the pre-Independence period. Right wing and left wing elements within the Congress had debated the roles of the private and the public sectors, of large and small enterprises, and the content of post-Independence economic planning in the pre-Independence period.15 As a result of immediate post-Independence controversies, however, the plans of the left wing in the Congress for nationalisation of all large enterprises were diluted to measures for governmental regulation16 of initiation, expansion, and change of location of large industrial enterprises, the last named for the purpose of avoiding geographical concentration of industrial development. The 1951 Industrial Development and Regulation Act (IDRA) which was, and is, the chief administrative instrument of industrial planners, defined the size of the enterprise which would come under its purview, and also defined (by exclusion) enterprises which would be free of such regulations. This excluded sector came to be known officially as modern small enterprise sector. In 1954, the office of the Development Commissioner, Small Scale Industries, was established in the Ministry of Industry in Delhi as-the administrative agency responsible for planning and monitoring