The latest IMF growth projections have India pegged to be the fastest growing economy this year. However, if one looks closer, what you see is not what you get. India is a country of contrasts; it is one of the most unequal countries in the world. Even job holders belonging to middle-and upper middle-class families are struggling to make ends meet with rising food prices. Millions of Indian youth entering the workforce continue to struggle to find jobs. The unemployment rate in the country increased to 7.83% in April, with this statistic being even higher for urban India, according to the Centre for Monitoring Indian Economy.
Underlying the seemingly positive growth projections for India are phenomena called, “jobless growth” and “ruthless growth”.These are not positive in any way as they imply a widening gap between the rich and the poor and unemployment rates that are going through the roof. The participation of women in the labour force has also been on a decline in the last few years.
The problem is clear: India needs more jobs. As many news outlets, including the New York Times, have reported, job creation is essential for the country’s future. But, where–and how–will these jobs be created? It’s time to give credit, and more support, to the true job creators of any country, the small and growing businesses (SGBs).
In India, over 110 million jobs are generated by micro, small, and medium enterprises. Outside of agriculture, these enterprises are the second largest employer in India. However, over 90% of those jobs are created by micro-enterprises that remain barebones operations throughout their existence. To meet the job creation needs of India’s growing population, we need to prioritize investment into the companies often called “the missing middle.” These are too big for traditional microfinance but often unable to access the seed or growth capital that more fashionable tech startups receive.
Read the full article about small and growing businesses in India at Global Washington.