Mr. Sachin Alug, CEO, NLB Services.
“Home to 633.9 lakh enterprises, India has the strongest growing cohort of Micro, Small & Medium Enterprises, generating mass-scale employment across India, especially in Tier II and Tier III regions. Today, small businesses which comprise 96% of industrial units are the second largest employment generator in the country. Overall the MSME ecosystem contributes to over 33% of the GDP, driving 62% of the employment on the domestic front. However, the average contribution of MSMEs in employment generation across other emerging economies stands at 77%, indicating untapped potential that can be explored in India.
Currently, the MSME sector employs about 120 million and by 2025 the sector is expected to generate over two lakhs jobs. The slew of new job opportunities will span across the services sectors and manufacturing sectors, both across urban and rural India. Incidentally, many emerging industries under the MSME umbrella like e-commerce, logistics, and supply-chain are also expected to witness a surge in new employment.
Driven by the surge in digitization and the post-pandemic shift in the workforce, MSMEs will witness an increased demand for roles in construction, manufacturing, transportation, and supply-chain, etc. The majority of the new roles will emerge across states like Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, and Telangana.
MSMEs are also playing a critical role in bridging gender parity, especially in fostering entrepreneurship. On the one hand, women-led enterprises stand at 20.44% of micro-businesses, 5.26% of small businesses, and 2.77% of medium businesses. Incidentally, compared to male-owned MSMEs, women-led MSMEs have registered better growth in income. However, there is significant potential to expand male to female ownership ratio in this ecosystem. Over the next 5 years, we expect another 20-25% surge in women-led MSMEs, which will further complement job creation.
To augment the potential of MSMEs in the economic landscape, a dedicated focus is required to promote regional industrial distribution, foster industrial development, simplify compliance & operations, optimize costs, and improve financial access. MSME’s pivotal role in employment, GDP, and exports highlights the need for targeted policies and initiatives to maximize their potential.”
