A few years ago challenge of job creation had become the main attraction for debates. And Prime Minister Narendra Modi made several statements around this subject. At SMEStreet, we published a series of reports on this subject and have highlighted a simple fact that MSMEs are the only sector of the economy which holds the potential to transform Job crunch challenge into a success story. Now, in recent data released by CII, it is mentioned that job creation by the micro, small and medium enterprises (MSMEs) sector saw a growth of 13.9% in the past four years, claims an industry survey.
The findings are contrary to the official and other industry data which show that there were massive job losses since the note-ban and GST implementation in this very sector. In an earlier interaction Chandrajit Banerjee, Director General of CII while talking to SMEStreet have mentioned that MSMEs are the most important part of the economic ecosystem. “Government’s policies that are designed keeping the MSMEs’ interest at the forefront will play and are playing a very critical role in the development of national economy. Last few years we have been witnessing high packed action around MSMEs and all this is resulting into some good positive numbers related to per capita income, job creation and GDP,” he said.
While private sector economic think-tank has found that as many as 13 million jobs were lost in 2018 alone, the official NSSO data show that unemployment rate touched a 46-year high in 2018.
According to a CII survey among over one lakh MSMEs, there have been a 13.9% increase net jobs additions (or 3,32,394 new jobs created), over the past four years, which is a 3.3% increase per annum in these four years.
The survey, that covered 1,05,347 MSMEs of varying sizes, across sectors, located in about 350 industrial centres spread across the country, indicates that micro enterprises were the largest job creators in the past four years and will continue to be so in the next three years.
To put the findings in context, the survey mapped the jobs figures against publicly available macro-level data sourced from the Labour Bureau (for total workforce).
“Given that the total workforce size according to the Labour Bureau is estimated at 450 million, the overall job additions work out to 13.514.9 million per annum,” it said.
The top job-generating sectors were hospitality and tourism followed by textiles and apparel and metal products, during the past four years. Machinery parts and transport and logistics were the next significant job creators, it showed.
In terms of states, Maharashtra, Gujarat and Telangana were the largest job creators, while in case of exporters, Maharashtra, Tamil Nadu and Telangana topped.
“There is an expectation of higher growth on employment for the next three years,” the survey said.
This optimism emanates from the fact that government initiatives like the 2% interest subvention given to all MSMEs and trade receivables e-discounting system (TReDS) would drive future growth leading to more employment, the report said.