MSME sector could create 1 crore jobs in five years

By

Isabelle Crossley

Published
Apr 9, 2019

The micro, small and medium enterprises sector has the potential to create one crore jobs in India in the next five years. However, the industry’s growth is hampered by the country’s low ratio of domestically manufactured products, according to NRI Consulting, an affiliate of the Japanese financial holdings company Nomura Holdings.

Voting for the India election will begin on April 11 and one of the main campaign focuses has been employment. As part of this debate, NRI Consulting shared its findings on India’s MSME sector with ET Bureau. The consulting firm stated that the MSME sector could be a strong source of employment moving forward and it is currently India’s largest employment generating sector.  

“A deep dive into product groups manufactured in various clusters in India suggests that a dedicated focus on developing these MSMEs can create additional 75 lakh to one crore employment opportunities in the next four to five years through partial substitution of imports,” the firm said. “This could be done by following a market-oriented approach for MSMEs, wherein the organised private sector participants invest in capacity building of the MSMEs against a valid for-profit business case with long term benefits.”

The firm stated that the low ratio of domestically made products in the Indian market is what is hampering the sector. Only 15 percent of India’s products are produced in the country and increasing this percentage would help the sector to grow and create yet more jobs. The firm also stated that India is an attractive market, despite slow demand, thanks to its growing middle class with rising disposable income. 

Many of India’s fashion, jewellery, and textile businesses are MSMEs and so the sector is an important part of India’s fashion industry. The government has promised an increase in the flow of bank funds to the sector.