‘Tata, Birla, Reliance or Adani wont create jobs or even railways but SMEs will’: Economist Ajit Ranade

Tata, Birla, Reliance or Adani wont create jobs or even railways but SMEs will: Economist Ajit Ranade

Summary: Economist Ajit Ranade highlights the crucial role of small, medium, and micro enterprises (SMEs) in job creation, stating that India needs 15 million new jobs annually and that this demand cannot be met by large corporations like Tata, Birla, Reliance, or Adani. Instead, SMEs serve as the backbone of employment generation due to their labor-intensive nature, geographical reach, and ability to foster entrepreneurship.

Despite their potential, SMEs face challenges such as limited access to credit, regulatory burdens, and market competition. To unlock their full capacity for job creation, policy support is essential—including easier financing, digital adoption, and skill development initiatives. Ranade’s insights emphasize that India’s employment crisis can only be addressed by empowering SMEs, ensuring sustainable and inclusive economic growth.

Economist Ajit Ranade has shed light on a critical aspect of job creation, emphasizing that India requires approximately 15 million new jobs annually to sustain its growing workforce. However, the responsibility of generating these employment opportunities does not rest with large corporations like Tata, Birla, Reliance, or Adani. Instead, small, medium, and micro enterprises (SMEs) are expected to drive job creation.

Ranade’s remarks underline an important economic reality: while major conglomerates contribute significantly to the economy in terms of revenue and investment, their ability to generate large-scale employment is limited due to increasing automation and capital-intensive business models. On the other hand, SMEs and startups, which are more labor-intensive, have a much larger capacity to absorb India’s workforce.

Why SMEs Are the Backbone of Job Creation

  1. Higher Employment Intensity
    SMEs employ a larger number of people per unit of capital investment than large industries. From local manufacturing units to service-oriented businesses, SMEs provide diverse employment opportunities, especially for semi-skilled and unskilled workers.
  2. Wider Geographic Reach
    Unlike large corporations that concentrate in metropolitan cities, SMEs flourish in small towns and rural areas, reducing regional unemployment and fostering inclusive economic growth.
  3. Innovation and Entrepreneurship
    A thriving SME ecosystem encourages entrepreneurial ventures, leading to new businesses that continuously generate employment opportunities. The growth of digital platforms, fintech solutions, and government support initiatives like Startup India and Mudra loans have further enabled young entrepreneurs to establish and expand their businesses.
  4. Resilience in Economic Downturns
    While large corporations may resort to layoffs during economic downturns, SMEs tend to retain employees and adapt flexibly, ensuring better job stability in uncertain times.

Challenges SMEs Face in Job Creation

Despite their potential, SMEs encounter multiple challenges that hinder their capacity to create jobs effectively:

  • Lack of access to credit and funding
  • Regulatory and compliance burdens
  • Technological limitations
  • Market competition from larger firms and global players

Policy Support for Strengthening SMEs

To enable SMEs to play a more significant role in employment generation, policy interventions must focus on easier access to finance, digital transformation, skill development, and regulatory simplification. Governments and financial institutions should collaborate to provide low-interest loans, digital literacy programs, and incentives for hiring employees.

Ajit Ranade’s insights serve as a crucial reminder that India’s employment crisis cannot be solved by relying solely on large corporations. Instead, fostering an environment where SMEs can flourish, innovate, and expand is the key to sustaining job creation. By supporting small businesses, India can build a resilient and inclusive economy that ensures livelihoods for millions.

Check out more on Startup News and Startup Funding News. Stay connected with us across all our social media platforms: Facebook, Instagram, LinkedIn, X (formerly Twitter), Google news and Join Our Community.

Leave a Reply

Your email address will not be published. Required fields are marked *