Mains Paper 2: Social Justice|Issues relating to development and management of Social Sector/Services relating to Health,Education, Human Resources.
From UPSC perspective, the following things are important:
Prelims level:Nothing as such.
Mains level: The news-card analyses the problem of India’s MSME sector, in a brief manner.
- It has been observed by some experts that the regulatory framework that has choked MSMEs has contributed to the farm crisis and quota demands in India.
- And that farm loan waivers, migration restrictions and10 per cent economically backward reservation in government jobs does not represent a sustainable approach.
Overhauling India’s MSME sector
- The only way to create millions of jobs with decent wages is a policy re-imagination of the rights, needs, and treatment of formal MSME entrepreneurs.
- The average employer in India is not a formal MSME or somebody large like Marico, Lupin or the Tatas, but an informal MSME because the present regulatory framework are not pro-informal sector MSME.
- Fewer than 2 per cent of our 63 million MSME’s are formal.
Labour market interventions in MSMEs can be by:
- Taking the long view:a 10-year plan is not 10-one-year plans for formalisation, urbanisation, industrialisation, financialisation and human capital.
- Recognise progress made:6 million new formal enterprises and 30 million new social security payers in the last three years), and
- Get bolder with structural interventions that matter most to MSME entrepreneurs.
India’s problem is no longer jobs but wages
- Creating millions of well-paying jobs needs ending killing of millions of MSMEs (small but formal employers that will grow and pay the wage premium because of enterprise productivity).
Formalisation of MSMEs need
- lower regulatory framework,
- labour law rationalisation,
- e-governance, and
- education effectiveness
- all in turn need civil service reform.
- The only solution to helping farmers is having less of them and making the remaining productive — US farms with more than $1 million in sales are only 6 per cent of farms but produce 66 per cent of output.
- The need of the hour is to have enough formal MSME employers.