India’s employment engine: Not startups but thousands of micro units created lakhs of jobs in 2019

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Updated: Dec 24, 2019 2:37 PM

Skilling, Labour, Talent for MSMEs: Technology upgradation is among the key areas for the government to encourage small businesses even as it aims for half of India’s GDP to come from MSMEs in five years.

The number of jobs created in 2019 by tech startups was 60,000 direct and 1.3-1.8 lakh indirect.

Skilling, Labour, Talent for MSMEs: 2019 saw setting up of 65,312 micro-enterprises that created 5,22,496 jobs under the government’s credit-linked subsidy scheme Prime Minister’s Employment Generation Programme (PMEGP). The margin money subsidy used was Rs 1929.83 crore in the year. PMEGP was launched in FY09 to boost entrepreneurship in India by supporting artisans and unemployed youth in setting up their micro-businesses. The data was shared in a statement by the MSME ministry on Tuesday as part of its year-end review. This is in contrast to the number of tech startups in 2019 that increased from 7,700-8,200 in 2018 to 8,900-9,300 in 2019, as per a recent Nasscom report, and created 60,000 direct and 1.3-1.8 lakh indirect in 2019.

The other credit-related schemes were Credit Linked Capital Subsidy-Technology Upgradation Scheme (CLCS-TUS) and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The credit linked capital subsidy component of the CLCS-TUS was launched by MSME Minister Nitin Gadkari in September this year. The scheme offers a capital subsidy of 15 per cent on institutional finance of up to Rs 1 crore availed by MSMEs for upgrading their plant and machinery with the latest technologies. The government has released Rs 338.01 crore in the current financial year. 

On the other hand, under CGTMSE — which offers credit guarantee to lenders providing loans to MSMEs, 5,46,127 credit facilities have been approved amounting to Rs 33,381 crore in guarantee, the ministry said.

Also read: Caution for small businesses: The older your PCs, the higher your productivity losses will be

Technology upgradation is among the key areas for the government to encourage small businesses even as it aims for half of India’s GDP to come from MSMEs in five years. The MSME ministry is implementing the Technology Centre Systems Programme (TCSP) at an estimated cost of Rs 2,200 crore. The government has also sought assistance from the World Bank for loan of $200 million to set-up 15 Tool Rooms and Technology Development Centres (TCs) apart from upgrading the current 18 TCs in India. These TCs have also skilled 3,59,361 in 2019, the ministry said in the annual review. 

In fact, in terms of skill development to help youth become entrepreneurs, the government had sanctioned over Rs 135 crore under the Entrepreneurship Skill Development Programme (ESDP) for organising various skill development programmes along with state government, industry bodies, social enterprises etc. In 2019, 3,000 such programmes were conducted/ sanctioned.

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