Amid soaring net worth of Indian billionaires even as pandemic battered small businesses, country’s top MSME body has said that concentration of wealth in few hands is a dangerous sign for a country like India.
Defying the calamitous impact of Coronavirus pandemic, India’s billionaires are reported to have seen their net worth rising. As per Billionaires Insights Report 2020 published by UBS and PwC, the net worth of Indian billionaires between April and July increased by 35% to $423 billion.
The alarming situation does not bode well for the country as large corporates controlled by big business tycoons create fewer jobs. As against this, micro, small and medium enterprises (MSMEs) generate much more employment.
“This is quite an irony and a very dangerous sign. If business gets concentrated in few hands, this will be a huge challenge especially for a country like India which has huge population and that too in the younger age group. They need jobs. Most of the billionaires are in the business where they need lesser and lesser manpower,” Federation of Indian Micro and Small & Medium Enterprises (FISME) President Animesh Saxena told Top Lead India.
“Either they are high technology-based company or they are using a lot of automation so not enough jobs are being created. The government has to take this very seriously. This is a serious situation,” he noted.
India’s MSME sector accounts for about 90% of its industrial units and contributes to 45% of its total industrial value addition and almost half its exports. Of the estimated 63.38 million MSMEs, more than 63.05 million or 99% are micro. About 0.33 million are small, and only 5,000 are medium. Almost 96% of the MSMEs are proprietary firms.
Low on technology and automation, the MSMEs employ about 40% of the 450 million workforce in the informal sector.
In an exclusive interview, FISME’s Saxena said that India faces a major challenge of creating more jobs which can only be generated by the MSME sector. In order to achieve the mammoth task, the government should provide wage subsidy and encourage small firms to hire more manpower.
“India has world’s largest youth population and if they are not employed meaningfully and productively there could be disastrous consequences for the society. It could create social unrest. So, the government has to promote MSMEs which are low tech but high job creators,” the FISME boss said.
He suggested that government should focus on skill development as well as promoting those enterprises where job opportunities are more.
“Maybe, the government can dole out some wage subsidy for creating jobs,” the industry veteran added.
While the role of MSMEs has been underlined by most experts and economists, the sector has been among the worst sufferer during the pandemic. Almost 20% of the MSMEs are estimated to have shut their units temporarily since pandemic onset and subsequent lockdown. They are struggling to come on their feet even as economy has been unlocked and steps have been taken to support them.
Read Full Interview: 20-25% MSME units still shut and trying to revive their business: FISME President Animesh Saxena
Well written Quite perceptive