Do MSMEs Create Employment? Attestation from India

Abstract

The Micro, Small, and Medium Enterprise (MSME) sector has developed as a vibrant sector of the Indian economy and is an essential engine of the economy. It contributes significantly to the growth of entrepreneurship and creates the second-largest number of job opportunities. In 2019-2020, the MSME sector will contribute considerably to the development of the Indian economy, accounting for 95 percent of industrial units with an extensive network of 63 million firms, 29 percent of GDP, and nearly 49.8% of exports employing roughly 111 million people. Because the global economy is slowing, it should emphasize growing the MSME sector to improve job opportunities, particularly for young people. These MSMEs create employment possibilities and aid in industrialization in rural areas, reducing income inequality among inhabitants. MSMEs contribute considerably to the development of the Indian economy through exports, domestic production, minimal investment requirements, operational flexibility, and technology-oriented firms, among other things. So, this paper has attempted to understand the role of MSMEs in providing employment opportunities and pushing toward the country's inclusive development. The data for the study has been collected from various secondary sources such as government websites, magazines, multiple reports, and newspapers. Descriptive statistics, correlation, and co-integration analysis were used in the study. The result shows, Have MSMEs created job opportunities in the economy? We used time-series data to analyze the long-term relationship and trend between the variables.