Q.Explain the contribution of MSMEs to employment generation in India.

Job creation per rupee invested is the sector's single strongest economic argument.

One of the strongest arguments for promoting MSMEs is their employment-generating capacity relative to the capital they require. Because MSME production processes tend to be more labour-intensive and less automated than large-scale industry, a given amount of capital invested in the MSME sector creates a considerably larger number of jobs than the same capital would in a highly mechanised large enterprise.

This matters greatly for a country like India, where labour is abundant relative to capital. MSMEs employ people across a wide skill spectrum — from unskilled workers in traditional handicrafts to trained technicians in light-engineering ancillary units — and their geographic spread into semi-urban and rural areas (including across Andhra Pradesh's districts) means the employment they create reaches areas that large industry, concentra …