MSMEs created 2.46 lakh more jobs post GST

India’s micro, small and medium enterprises (MSME) sector not only survived demonetisation but created 246,416 more jobs than those which existed before it was implemented, a recent survey released by the India SME Forum shows. While the MSME sector has largely welcomed the implementation of Goods and Services Tax (GST), the immediate effect of demonetisation resulted in job losses in many MSMEs.

States where over 80 per cent of MSMEs shed their staff were Jharkhand (94 per cent), Tamil Nadu (91 per cent), Punjab (89 per cent), Bihar (88 per cent), Assam (87 per cent), Uttar Pradesh and Himachal Pradesh (both with 86 per cent), Chhattisgarh (85 per cent), Kerala (84 per cent), Haryana (83 per cent) as well as Goa (82 per cent).

The survey data shows all those who were retrenched — including those employed on contractual, cash, temporary or seasonal basis — were hired back by the MSMEs. The negative after-effects were found to be rather short-lived as seen in the survey data about new employees.

Nearly 66.6 per cent of MSMEs surveyed collectively hired an additional 246,416 people in the 18 months from April 2017 to September 2018 at an average of 9.776 jobs per MSME unit and an overall average of 6.50 jobs created per unit on including all the MSMEs surveyed. Significantly, despite being criticised for the way in which GST was implemented, MSMEs across the country welcomed it.

Data shows that 62.13 per cent of MSMEs surveyed termed GST as the single biggest reform or that it made running a business easier, though 9 per cent of them said that more work is needed to implement GST.

Only 28 per cent of MSMEs held the introduction of GST responsible for MSMEs going out of business or for GST making business tougher. The survey was conducted during October to December 2018 in 23 states across the country with 37,680 respondents.

President of India SME Forum Vinod Kumar said: “MSMEs seem to have given a thumbs up to the Narendra Modi despite demonetisation as well as a few issues regarding the implementation of GST.  I am particularly intrigued by their buoyant mood and their job generation capability even in a market phase with subdued sentiments.”