A latest report by NRI Consulting, an affiliate of Nomura Holdings suggests that if nurtured well, micro small and medium enterprises (MSME) has the potential to create one crore jobs in the next four to five years.
Currently, only 15 percent of what is consumed in India is made by the domestic manufacturing industry, limiting the country’s ability to create employment opportunities, as per the consulting firm. Although according to a CII survey in the last four years stood the number of jobs in the sector increased by 13.9 at 3,32,394 (higher than the base four years ago), the sector still holds a lot of potential to create more jobs.
If a market-oriented approach for MSMEs is adopted and the organized private sector participants invest in capacity building of the MSMEs then the gap can be bridged.
One element that is expected to drive the sector’s growth is the increased focus of central and several state governments. Recently, a lot of efforts have been made to enhance the flow of bank funding to make the sector stronger.
For instance, Uttar Pradesh’s BJP government launched ‘One District, One Product’ (ODOP) scheme in January 2018, seeking to revitalize traditional industries and MSMEs in every 75 districts in the state. Further, Telangana launched an MSME networking portal and the central cabinet approved an earlier MoU between India and Republic of Korea on startup cooperation.
These investments by the government together with inclusive business development services that are built on a consensus on the challenges, goal and broad policy direction among the key stakeholders will decide the future of the MSME sector.