How does the potential of small and medium business (SMBs) help in resolving the unemployment problem in India? Elaborate (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 6 years
KEY POINTS
· According to Ministry of Labour, SMBs—more accurately, micro, small and medium enterprises (MSMEs)—employ around 111 million people and contribute nearly 29% to India’s GDP.
· India’s Micro, Small, and Medium Enterprises (MSMEs) base is the largest in the world after China.
· MSMEs largely confined to unorganized sector where significant amount of population gets employed, by addressing the needs of this sector employability potential can be increased exponentially.
· They are mostly established on personal savings or small borrowings from family and friends (reduce the burden on banks with respect to NPAs)
· They have suppliers and distributors based on trust and strong personal relationships; their manufacturing and service lines are reasonably well tested, establishing a strong foundation in business entity.
· They have an intimate knowledge of their markets and their customers and because they are small operations, they tend to have larger retention of employees. In most instances, they have mature businesses that already comply with regulatory norms.
· Moreover MSMEs preserve the not only cultural heritage of India and also act as lifeline to the Indian economy. Eg: Khadi Village Industries Commission helps in the export of cotton based products, handlooms in India etc.
· MSMEs further boosts the share of GDP in manufacturing sector, and bossts employment in non-farm sector thereby increase the incomes of the households (increasing percapita GDP).
· The fruits of demographic dividend can be reaped effectively by improving the employability in MSME sector.
Raj 6 years
Kindly Review. Thanks!!
IAS Parliament 6 years
Need better understanding. Explain how does MSME’s increase the employability in India. Keep
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