Micro, Small and Medium Enterprises (MSMEs) and traders have seen 35 lakh jobs lost in the past four-and-a-half years, according to an All India Manufacturers’ Organisation (AIMO) survey. The sector also showed declining profits since 2014, and some reasons include demonetisation and GST rollout, the survey said.
It was found that the sectors dominated by unorganised labour were the worst hit. These include tailors, cobblers, barbers, plumbers, floor workers, and other types of workforce working in the dyeing, stitching, stone, tannery, plastic, and crackers units. The survey added that traders are shutting shop due to insurmountable competition from ecommerce sales.
The survey analysed over 34,000 units in October 2018, and found job loss at 43 percent in the trader segment, 32 percent in micro segments, 35 percent in small segments, and 24 percent in mediums-scale industries. Results show the dire conditions in the sector, and the survey adds that the results should remind the Centre to revive the sector ‘with a lot more seriousness and urgency."
KE Raghunathan, President, AIMO, told The Indian Express that the operational profits of traders across the country have dropped by about 70 percent since 2014. He added that 2015-16 saw growth in all areas of business due to high sentiments and expectations from the new NDA government.
“It went down next year due to demonetisation. The rollout of GST, due to financial availability and higher outstandings with government payments, and compliance matters, all worsened these sectors in the next three years,” he said. “We have done this study in the background of having ‘Make In India’, ‘Skill India’, ‘Digital India’, ‘Start Up India’ campaigns, demonetisation, GST implementation and tax laws, change in the classification of MSMEs, growing NPA phenomenon and the entry of foreign-owned business models such as Ola, Uber, Flipkart and Amazon,” he added.