CII organises ‘Covidonomics Conclave’
"MSME sector had seen demand and supply equations change due to Covid. Several of them had cut their operations and closed," said Naveen Agarwal, partner of Ernst & Young
Hyderabad: Agriculture provides employment to about 40 per cent of the workforce in the country but its contribution to the GDP is about 16 per cent. This gap needs to be corrected and MSMEs fit right in to bring this shift in sectoral contribution, said Naveen Agarwal, partner, Ernst & Young.
Speaking on ‘Covidonomics Conclave’, organised by industry body Confederation of Indian Industry (Southern Region) here on Friday, he said the MSME sector had seen demand and supply equations change due to Covid. Several of them had cut their operations and closed temporarily or even permanently. This had resulted in loss of employment to many, he said.
There are about 6.3 crore micro, small and medium enterprises in the country, employing about 11 crore people. The sector is an enabler of economic activities as it takes a lot of unskilled and low skilled workforce. The sector now contributes about 30 per cent to the GDP and about 50 per cent exports come from it. The Gross Value Added (GVA) has increased to 34 per cent from the earlier 31 per cent during 2014-15, Agarwal said.
Stating that MSMEs will be the key employment generator in the grand plan to create nine crore new non-farm jobs by 2030, he said India had the largest number of MSMEs after China.
However, in terms of productivity, India was far behind. “Covid has hit demand, supply, disposable income factors and induced reverse migration to villages,” he said, adding that unemployment had increased at all levels and this further pushed the economy down.
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