India should focus on Micro, small and medium enterprises now

Meeting the employment needs of crores of young people is one of the major responsibility of the government now. As discussed in my previous post https://thekalyan.com/2014/05/24/jobs-are-growing-but-not-in-all-sectors/ major set of workforce are in need of employment is in manufacturing, construction, tourism sectors etc. Micro, small and medium enterprises (MSMEs) have a great potential to meet this requirement. Next to agriculture, this sector, contributes to 8% of the overall GDP. Most of the people in this sector are entrepreneurs

smallKalyan: (image taken from rediff) for the article

While the government is helping this sector through financial, technological and marketing assistance, assistance in conducting tool rooms, there are still some bottlenecks. Key problems are related to labour laws, taxation, market uncertainty and majorly the skill level of the workforce.

  • For instance, MSMEs have multiple, stringent labour laws to follow. This means they have to employ additional staff with financial and legal expertise to comply with the laws that adds to their costs.
  • MSME’s face tough competition. As they don’t have any assured information on regular supply of raw materials for production. So they will be vulnerable to price fluctuations.
  • Inadequately trained staff also has an impact on the MSME’s – with the limitation pertaining to infrastructure from government training institutes.

 

What needs to be done?

  • Provide a careful analysis of markets and projections keeping global trends in mind. Like that in agriculture sector, dedicated radio and TV programs like Krishi Darshan can be broadcasted for MSMEs.
  • More Subsidies, tax concessions.
  • Service MSME’s require less finance than that of manufacturing, but can generate quick jobs. So concentrating more on it.
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