Skills, Labor and Talent for MSMEs: “The Covid-19 epidemic has temporarily affected several sectors, including MSMEs in the country, including their employment,” said MoS MSME Bhanu Pratap Singh Verma.

Skills, Labor and Talent for MSMEs: According to government data, the number of people employed by Udyam registered MSMEs has skyrocketed during Covid. In fact, the number of people employed by MSMEs in FY21 more than doubled from pre-Covid FY20 and was also significantly higher than the expected number of industry job losses due to the pandemic. In addition, the highest employment rate in FY22 was recorded in the past five fiscal years.

Data shared by MoS MSME Bhanu Pratap Singh Verma in a written response to a question during the ongoing second part of Parliament’s budget session showed that 43,37,444 people were employed in SMEs in FY20. This rose 106 percent to 89,53,149 in FY21 and 4.9 percent to 93,94,957 in the current fiscal year – the highest in the FY18-FY22 period. In FY18 and FY19, 51,98,478 and 38,55,539 people were employed by MSMEs, respectively. Currently, there are 77.35 lakh MSMEs registered on the Udyam portal, from 25 lakh to March 2021.

“The government should have provided data on the number of companies in relation to the number of jobs generated. Employment growth in FY21 appears to be in line with portal enrollments. So it is possible that this is not the number of new jobs being created. The inclusion of wholesalers and retailers in the MSME category last July could also be the reason for the jump this year. Nevertheless, MSMEs generally employ less than two people per year,” Anil Bhardwaj, secretary general of the Federation of Indian Micro Small & Medium Enterprises (FISME) told Financial Express Online.

Responses from the MoS MSME office were not immediately available for the story.

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“The Covid-19 epidemic has temporarily affected several sectors, including SMEs in the country, including their employment. Since MSMEs are present in both the formal and informal sectors, data on temporary or permanent job losses in the MSME sector is not kept by the Indian government in the Ministry of MSME,” Verma told Rajya Sabha in his reply.

Maharashtra with 11.23 lakh people employed by the Udyam MSMEs followed by 8.54 lakh people employed by MSMEs in Tamil Nadu, 8.47 lakh in Uttar Pradesh, 8.29 lakh in Telangana and 8.20 lakh in Rajasthan were the top five states in the number of people employed by their MSMEs in FY22.

Verma added that the MSME ministry has implemented several schemes to increase employment in the MSME sector in the country. These include the Prime Minister’s Employment Generation Program (PMEGP), the Cluster Development Program for Micro and Small Enterprises (MSE-CDP), the Fund for the Recovery of Traditional Industries (SFURTI), the Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) and A Scheme to Promote Innovation, Rural Industry and Entrepreneurship (ASPIRE).

However, post-Covid, multiple studies had shown the impact of Covid on jobs in the SME sector due to lockdown-induced restrictions on business operations and movement of people, including factory workers. For example, a survey last year by the MSME Consortium of Indian Associations (CIA) of 81,000 self-employed and SMEs through its 40 SME partner associations found that 59 percent of respondents had reduced, laid off, or removed their workforce in FY21 in comparison to the pre-covid period. Another survey by community social media platform LocalCircles with more than 7,000 responses from SMEs, startups and entrepreneurs reported that 78 percent of SMEs and startups had cut their workforce in the March-October 2020 period.

Importantly, there is no recent data available on the total number of jobs created so far by the SME sector in India. The most recent was 11.10 crore jobs according to the National Sample Survey (NSS) 73rd round conducted during the 2015-16 period. These include 360.41 lakh industrial jobs, 387.18 lakh in commerce, 362.82 lakh in other services in rural and urban areas across the country.

This post Government data: Number of people employed by Udyam MSMEs doubled in FY21 from last year despite Covid

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