Skill India hasn’t yielded much to boost MSME labour output: Economist

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Published: June 20, 2020 9:20 AM

Sharing similar views, executive vice-president (Wadhwani Advantage) of Wadhwani Foundation Samir Sathe stressed the need to strengthen SMEs to meet growing demand and become competitive in the long run.

Micro, small and medium enterprises, MSME, covid-19 pandemic, coronavirus impact on MSMEs, economists on MSMEs, expert opinion on MSMEs, Skill India, Skill India and MSMEsAn expert emphasised that public procurement could be a powerful tool to create demand.

Micro, small and medium (MSME) enterprises are perhaps facing their worst times in the last few years and the Covid-19 pandemic has exacerbated the situation, experts feel. They stress that there is an urgent need to bring such units on the government radar so that they are eligible for benefits. These
units need to be trained to become competitive in the long run.

At a webinar organised on Friday on handholding MSMEs back to recovery, Santosh Mehrotra, a professor of economics at JNU, said: “In 2011-12, NSSO data tell us that formally trained workers in our workforce were only 2.3%, and remarkably, despite Skill India, in the Periodic Labour Force Survey (PLFS), the NSS of 2017-18 informed us that this share has gone up to just 2.4%.”

“Among unorganised sector, 70% of enterprises are unregistered. So, suppose the government has a tech upgrade programme, who is it going to reach out to? If you do not register enterprises, what intervention about technology are you going to make,” Mehrotra said.

Sharing similar views, executive vice-president (Wadhwani Advantage) of Wadhwani Foundation Samir Sathe stressed the need to strengthen SMEs to meet growing demand and become competitive in the long run. “We are reaching a stage where MSMEs now hardly have 40-45 days of cash and so much management inability to address supply and demand issues. The way we read the situation is that there is a huge need to train SMEs who have the ability to address demand,” he explained.

Charan Singh, a former RBI chair professor at IIM Bangalore, felt that it is time to have an institutional framework to train MSMEs. “My point is that if in MSMEs entrepreneurship is required, do we have a university where we can train them in different modules. My finding is that morality rate in the MSME sector is extremely high and 70% are not registered anywhere. We need to create MSME universities that train them in HR issues, tax laws, etc. We can have an MBA programme of 2 years in entrepreneurship.”

Anil Bhardwaj, FISME secretary general, suggested that increasing liquidity to MSMEs could provide some immediate relief. He emphasised that public procurement could be a powerful tool to create demand. In India, it is estimated by CUTS and other institutions that approximately a $1 trillion worth of goods and services are procured from municipality to central government, which is almost 1/3rd of India’s GDP, he added.

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