Effect of sustainable leadership development and employee empowerment in MSME industry in India

Abstract

Abstract In the 21st Century, The Micro Small, and Medium Enterprises (MSME) in India have established their credibility of mass employment and contributing to around 30% of India’s GDP in 2020. As of 2020, India is a house of 2.5 million units and proved the backbone of large sectors such as Manufacturing, Agriculture, Aviation, IT & ITeS, Pharma, Cement, and Automobile to name a few. India Government initiatives helped MSME to grow at the rate of 18.5% CAGR in 2019-2020. Indian Government is committed to bringing sustainable growth to the MSME sector. This brings the point to look into scalability issues often faced by these industries due to typical Owner and employee organization structure with lack of knowledge in recent HR practices. All the management and operational decisions are factored into top leadership (the business owner and his son’s). With the young entrepreneurs stepping into the family business, the face of this industry is bound to change further. Indian Government has doubled the budget for the MSME sector in FY22 that is $ 1.03 billion in FY 21 to $ 2.14 billion in FY22. With the Industrial revolution 5.0, India has witnessed multiple Unicorns in the last decade; therefore, it is bound to see maturity in leadership sustainability and focus on employees’ empowerment. The study goal is to look into labour law barriers faced by the MSME industry which is not covered in the FY22 vision document for the early adoption of a modern HRM approach to meet 5 trillion dollars business demands by 2025.