Enhancing Employment Skills and Supporting MSMEs for Sustainable Growth in India

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:

  • Employability of Graduates: According to the 2023-24 Economic Survey, only 51% of Indian graduates are employable, indicating a skills gap in the modern economy.
  • Income Opportunities: Reports from Hindustan Times suggest that hardworking and smart individuals can earn over ₹50,000 per month.
  • Workplace Stress: A survey by the emotional wellness platform YourDOST reveals that individuals under 30 are the most stressed at work.
  • Informal Employment: A staggering 90% of the Indian workforce is informally employed, with a high prevalence of casual employment.
  • Unpaid and Self-Employment: The 2024 Economic Survey indicates that 18.3% of workers are unpaid, while 57.3% of the workforce is self-employed.

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.

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

  • Government and Consultant Support: Government, consultants, and support systems must focus on transforming MSMEs, addressing their specific challenges and helping them leverage technological advancements.
  • Skill Development Initiatives: Implement targeted skill development programs to bridge the gap between education and industry requirements, making graduates more employable.
  • Promote Digital Transformation: Encourage MSMEs to adopt digital technologies, enhancing their productivity and competitiveness in the global market.
  • Emotional Wellness Programs: Introduce programs to address workplace stress, particularly for young employees, to improve overall job satisfaction and productivity.

By addressing these areas, India can harness the potential of its workforce, support MSMEs, and ensure sustainable economic growth amidst evolving global challenges.

 

Harsharan Singh Kohli

SCM Consultant , Ex-IKEA. Supply Planner , Procurement, Business Developer ,Operations Excellence , Executive development faculty. MITx US (Sust. SCM) & Data Science Certified

4mo

Thanks for sharing

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