Role of small and medium enterprises in indian economy
Answers
Explanation:
India's current population is around 1.33 billion out of which 63.6 % belong to the age group of 15-64 ( i.e., working population) . As we know, 70% of India's population live in rural areas where agriculture is the major occupation. Well, when you look at stats, 50% of work force is engaged in agriculture contributing only 18% to GDP. On the other hand, secondary and tertiary sectors( a.k.a Industrial and service sectors respectively) contribute to the rest of it, a good 72% but are unable to absorb the human capital. The prime reason for this is due to substitution of human resources by capital machines.
So, in this scenario, only Small and Medium enterprises can help in curbing the growing rates of unemployment. As they function at small scale, they can't use machinery and also requires less investment to set up. Thus, they help lowering the levels of unemployment and supplementing the figures of GDP.