Enhancing Employment Skills and Supporting MSMEs for Sustainable Growth in India
The Indian economy has shown remarkable resilience amidst current geopolitical challenges, maintaining stable inflation and a lower trade deficit (0.7% of GDP), alongside good foreign direct investment (FDI) inflow. Despite these positive indicators, employment remains a significant challenge, exacerbated by a lack of data availability and banking bad debts, a legacy of the COVID-19 pandemic. Additional factors such as geopolitical tensions, global warming, and the rise of AI technology continue to impact all skill levels.
The International Monetary Fund (IMF) highlighted in June 2025 that generative AI could lead to substantial labor disruptions and inequality. While the government strives to manage these challenges, over a dozen opposition parties repeatedly raise concerns about unemployment without fully analyzing and understanding the underlying issues.
Employment Landscape and Challenges
The employment landscape in India is undergoing a significant shift due to sector evolution, reforms, technological advancements, and the need for upskilling. Key observations include:
Opportunities for Improvement
The Indian government’s focus on manufacturing and industry growth presents significant opportunities for employment. The rise of tech-enabled platforms, especially those powered by AI, may increase internet-backed development and employment, potentially causing a global shift in existing employment structures. Digital transformation and sustainability, driven by the global economy, could create more business opportunities in India. However, greater emphasis is needed on supporting Micro, Small, and Medium Enterprises (MSMEs) and their skill development.
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Role of MSMEs in Employment and Economic Growth
MSMEs are crucial for balanced employment and economic growth in India. While large consulting firms assist top industries that can afford their services, MSMEs face bottlenecks that contribute to inequality. These smaller enterprises support large industries by facilitating needs and providing job opportunities for many young hopefuls. Given that a significant percentage of the workforce is currently not employable, MSMEs can offer low-skill jobs and help balance employment rates.
Recommendations
By addressing these areas, India can harness the potential of its workforce, support MSMEs, and ensure sustainable economic growth amidst evolving global challenges.
SCM Consultant , Ex-IKEA. Supply Planner , Procurement, Business Developer ,Operations Excellence , Executive development faculty. MITx US (Sust. SCM) & Data Science Certified
4moThanks for sharing