The Karve Committee, constituted in 1955, dealt with:

The Karve Committee, formally the Village and Small-Scale Industries Committee, was set up in 1955 by the Planning Commission under the chairmanship of Professor D.G. Karve.

Why it was set up:

• The Second Five Year Plan (1956 to 1961) gave priority to heavy industry under the Mahalanobis model.
• The government wanted to make sure that village and small industries were not neglected, because they provided large-scale employment.
• The committee was asked to prepare a programme for these industries for the Second Plan.

Main recommendations:

• Small and cottage industries should be developed to create employment in rural areas.
• Production of consumer goods should, as far as possible, be done by village and small industries.
• Village industries should be organised on a co-operative basis.
• There should be a gradual shift from traditional methods to improved techniques.
• Industries should be decentralised so that development spreads to villages and small towns.

Importance of small-scale industries:

• They need less capital and can employ many people.
• They use local raw materials and skills.
• They help reduce regional imbalance and migration to cities.

Institutions set up for these industries:

• The Khadi and Village Industries Commission.
• The Small Industries Development Organisation and State Small Industries Development Corporations.

Policy background:

• The Industrial Policy Resolution of 1956 also stressed the role of cottage and small-scale industries.
• Later, many items were reserved for exclusive production by the small-scale sector, although this list was gradually reduced after the 1990s.

Today:

Small industries are now covered under the category of Micro, Small and Medium Enterprises (MSMEs), with a separate ministry.

Why not the other options?

• ✗Agricultural prices, banking reforms and Centre-State relations were studied by other committees and commissions.