As part of the announcement on employment and skilling in Budget 2024-25, the government intends to provide internship to one crore youth in the top 500 companies of the nation in the country. While the scheme, prima facie, appears to be appealing to both industry and young job aspirants, exclusion of micro, small and medium enterprises (MSMEs) from the ambit of internship provider is inexplicable.

Given the stellar contribution the MSME sector makes to the national economy — 29 per cent to GDP, 50 per cent to total exports, one-third of the manufacturing output, employment to about 11 crore people — its inclusion in the scheme would have helped increase its access to tier 2/3 cities as well as the hinterland.

Though the top 500 companies have the option to rope in their supply chain providers for this scheme, not making MSMEs — the major driver of one of the fastest growing economies in the world — a direct partner may not deliver the desired benefits.

MSMEs foster innovation, entrepreneurship and creativity despite several constraints such as competition from big and professionally managed enterprises, limited access to finance and modern technology, competitive imports, regulatory hurdles, poor management, digitisation, infrastructure related limitations, etc.

Share in exports

According to Directorate General of Commercial Intelligence and Statistics (DGCIS), the share of MSME-specified products in all-India exports in 2023-24 was 45.7 per cent.

Besides, MSMEs are relatively more resilient than their larger counterparts, paving the way for the economy to recover from shocks and downturns; this was witnessed in the post-Covid period in India and elsewhere.

Per the latest available information from the Ministry of Statistics and Programme Implementation, and reported in the recently released Economic Survey, the share of MSMEs in all-India manufacturing output in FY22 was 35.4 per cent. This is quite significant, especially in the context of the global turmoil.

Initiatives such as the Udyam Registration portal are paving the way for formalising MSMEs, by providing a simple, online and free registration process based on self-declaration. Such reforms would give a boost to the MSME ecosystem. The inclusion of MSMEs in the internship scheme would allow interns to have exposure to a sector where productivity and competitiveness are generally high.

Given the small size of MSMEs, interns will also benefit from getting exposure to different business operations which may not be possible in a big enterprise, thus making them industry-ready and employable.

Who knows, some of the interns, after their stints in MSMEs, may become successful entrepreneurs themselves, and hence turn out to be job creators rather than job seekers.

The writer teaches in the Department of Production & Industrial Engineering at MBM University, Jodhpur

Published on August 26, 2024