The Ministry of Labour and Employment has to really labour hard to generate, collate and produce accurate job data.
During the recent elections, job loss and low employment rate were key issues deliberated upon, but most of the sources quoted were diverse, which included surveys. Since there is no specified and defined data on employment, it created much confusion among those who criticised the government and also among those who defended the government.
Collection of such data is no mean task as it engages government, private, organised and unorganised sector and hence mere counting of employees having a provident fund account may not lead to the accurate figures. According to a study around 2.7 per cent of all jobs in the country are government jobs and the rest 97.3 per cent comprise jobs in organised and unorganised sectors. All these 97.3 per cent jobs are in the private sector such as entrepreneurship ventures, selling, agriculture, working in factories/IT firms etc – all run by private individuals and not the State.
It was believed that with the growth of Micro, Small and Medium Enterprises (MSME) this would change. Among all the sectors, MSMEs was the largest job creator in the last four years – with growth of 13.9 per cent – and will continue to be so in the next three years, according to a survey by the Confederation of Indian Industry (CII). The report titled ‘Survey on Jobs Creation and Outlook in MSME Sector’ said hospitality and tourism, followed by textiles and apparel, and metal products were the other top job-creating sectors in this period. Machinery parts and transport and logistics were next on the list. However, the survey mentioned that there was a need for greater hand holding of the MSMEs which are yet to take full advantage of government initiatives. The survey that spanned over 1,05,347 firms, primarily in the MSME sector, was undertaken in more than 350 industrial centres in 28 States.
Also, amid all gloom over not enough jobs being created in the country, the Confederation of Indian Industry survey of over one lakh small and medium enterprises which was made public just before the Election 2019, have shown 13.9 per cent increase in net jobs created in the MSME sector in last four years or 3.3 per cent per annum. The report also added that given that the total workforce size according to the labour bureau is estimated at 450 million (projected for 2017-18), the overall job additions work out to 13.5-14.9 million per annum.
However, even if see the job growth in MSME, all is not good enough in this sector. Simple thing like appointment of exclusive ombudsman is likely to sort out many MSME grievances. Various organisations in the MSME now have seminars and workshops in the country and are trying to make their voice heard as they feel that the government has not given them enough attention. They are majorly miffed with the ever-changing banking norms and new laws. Delays in disbursement of loans from banks has led to the closure of many MSMEs and hence enhanced joblessness.
MSME organisations have, however, thanked the government for introducing online application for loans under the Prime Minister’s outreach initiative for the MSME sector. However, there is need to simplify and speed up the process of financial sanctions to SMEs. There is a constant complaint that the sanctioning of loans, both term and working capital, are unduly delayed putting the enterprise to great hardship.
In some countries such as USA, independent institutional mechanisms are put in place to deal with industrial distress. It is necessary that in India too such independent institutional mechanism is adopted with a view to dealing with revival and rehabilitation issues of SMEs. The present mechanisms are heavily tilted towards the bankers and are more likely to ignore the realities that face micro and small enterprises. Job creation and its sustenance can only happen if the business is stable. This stability will also help in better collection of data. Frequent changing of laws and regulation, except in the case of irrelevant and archaic laws, at the drop of a hat is only a knee-jerk reaction, which could be very detrimental for any growing business.