Why supporting MSMEs during Covid -19 will help socially backward groups?

Radheshyam Jadhav Pune | Updated on June 01, 2021

The sector contributes to job creation   -  The Hindu

Govt data show that such groups own almost 66% of MSMEs


With State governments imposing restrictions and lockdowns to control the second Covid-19 wave, Micro, Small and Medium Enterprises (MSME) in the country are once again witnessing business disruptions.

Various industrial bodies have demanded more relief to the MSME sector to support them in such difficult times. The data available with the Ministry of MSME show that helping the sector would help socially backward groups to combat the pandemic.

The Ministry’s annual report 2020-21 shows that socially backward groups own almost 66.27 per cent of MSMEs. The bulk of that is owned by OBCs (49.72 per cent). The representation of SC and ST owners in the sector is low at 12.45 per cent and 4.10 per cent respectively.

Rural areas have reported more Covid-19 cases in many States. And in rural areas, almost 73.67 per cent of MSMEs are owned by socially backward groups, of which 51.59 per cent belong to the OBCs. In urban areas, almost 58.68 per cent belong to the socially backward groups, of which 47.80 per cent belong to the OBCs. The report has used the National Sample Survey (NSS) 73rd round survey (2015-16) data.

The analysis of enterprises owned by socially backward groups in each of the three segments of the MSME sector reveals that the micro sector had 66.42 per cent of enterprises owned by the socially backward group, whereas small and medium sectors had 36.80 per cent and 24.94 per cent of enterprises owned by socially backward groups, respectively.

MSME employment

The sector has been creating 11.10 crore jobs (360.41 lakh in manufacturing, 0.07 lakh in non-captive electricity generation and transmission, 387.18 lakh in trade and 362.82 lakh in other services) in the rural and urban areas.

The MSME sector has contributed significantly over the last five years by fostering entrepreneurship and generating large employment opportunities at comparatively lower capital cost, next only to agriculture.

Widening domain

MSMEs are complementary to large industries as ancillary units and contribute significantly in the inclusive industrial development of the country. The MSMEs are widening their domain across sectors of the economy, producing a diverse range of products and services to meet the demands of domestic as well as global markets.

Males dominate in ownership of proprietary MSMEs holding 79.63 per cent of enterprises compared to 20.37 per cent owned by females. There is no significant deviation in this pattern in urban and rural areas, although the dominance of male-owned enterprises was slightly more pronounced in urban areas compared to rural areas (81.58 per cent as compared to 77.76 per cent).


Published on June 01, 2021

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