Experts are apprehensive that the big fish with greater financial clout and economies of scale will force the small ones to down shutters.

In his Budget speech, Union Finance Minister Yashwant Sinha said that the dereservation decision was a result of a long standing demand from farmers and the Ministry of Agriculture. It is intended to "benefit from a wider range of implements and tools at competitive prices and with requisite after sales service".

Small-scale manufacturers, however, claim that the consumer will be the loser because the big companies make expensive implements which are unsuitable in Indian conditions.

On paper, the whole idea appears to be very good but when judged on practical parameters, the picture is hardly rosy. "SSIs will be hit hardbecause their profitability will get eroded. Cut-throat competition in the business will become the order of the day. The dealers will go with big names. Volume-wise too, the small sector will lose considerably to the big companies," says L D Mittal, chairman, Sonalika Agriculture products.

"Though it will take time for the big players to enter this field, there will be a shake out for the small companies sooner or later," says Sarat Chopra, Gardex. Even the big companies entering the field are on a sticky wicket. Indian market is not prepared to accept the costly implements manufactured by big companies. Hi-tech equipment don't suit the Indian condition because here we have cheap labour.

"Farmers won't pay more to get some technically improved mechanical work done which they can do by making use of easily available cheap labour. You have to first understand the Indian condition before venturing into this field which goes against the big companies," points out Mittal.

The argument that the entry of bigcompanies will help farmers by bringing price-competitiveness and quality does not hold ground. As far as price-competitiveness is concerned, Mittal feels that the advantage of having lesser overheads goes in favour of SSIs.

"Big companies cannot provide cheap products. In fact, small sector can give price competitiveness. And this is why some small companies will sustain in the long run. The question is if someone is getting something at a lower price then why will he pay more. Moreover, a small company can manufacture implements of as good quality as a big company," says Ravi Wadhwa, partner, Rajico, a company exporting agriculture tools and implements to Africa.

Mittal too believes that big players will not be able to improve the quality substantially and he has concrete reasons for the same. "Just the entry of big players will not improve quality in practical terms because they will not be able to produce the implements suited to the practical needs of the farmers. Small players know what is requiredin different areas -- they know the exact requirement of the farmers."

Ultimately, the whole purpose of benefiting the farmer will get defeated, as they will end up paying more without getting anything extra, or even if they get it, it will not suit their requirement.

The agriculture tools and implements industry is dependent on tractors. "The tractor manufacturers have started making higher horsepower tractors for which higher horsepower implements are required. But in Indian conditions, this is not needed since we have predominantly small holdings. There is no future for big implements here," points out Mittal. "It is only an excuse that dereservation will help farmers but in practice it is not so," he says.

"The decision will neither help farmers nor the industry. It will only help the tractor manufacturers. Tractor manufacturers will force their implements with their tractors as package. Forced selling will hit farmers.

For if left to the farmers they will certainly opt for the cheap and suitableimplements produced by the small-scale sector," he adds. However, not everything is on track in the industry. "At present, a few companies are dominating. Farmers are forced to buy what these companies produce.

Dereservation will certainly provide the scope for improvement in quality," says Chopra.

Though opinion about improvement in quality is somewhat divided, majority feel that SSIs won't get totally wiped out from the scene. Those applying business acumen by exploiting the inherent advantage of being in the SSI sector will continue to remain in the game.

"As far as question of small scale getting wiped out is concerned, I feel its a misnomer. Big fish eats small fish -- it is more or less mechanical. Despite this, small fish never vanishes -- both small and big will remain in the playground," says P D Dhingra of Pee Dee Stream Lines.

"In fact, small-scale people are more capable of sustaining in the market. They function independently and they have know-how -- the only bottleneck is they don'thave resources," says Dhingra.

Those in the industry for a considerable period still feel that small units are more suited for this industry as they can produce need-based tools and implements. "At present, farmers tell their requirement and then the companies manufacture implements," says Mittal.

Now, if governments sticks to its decision, the composition of the industry will completely change in coming years. It will be for better or worse remains an open question. "Ultimately, farmers will be disappointed. The whole idea of providing quality and price-competitiveness will be thoroughly defeated," says Mittal.