#7 Unorganized Sector
India's unorganized sector is a huge part of our economy, accounts for 46% of our production. Think about it: 94% of our workforce – that's 50 crore people! – works in this sector. We're talking about agriculture, tiny businesses, construction, and trade. Agriculture employs the most people, around 45%, with micro-enterprises employing over 35% and the remaining are in trade and construction.
Now, things haven't been easy for the unorganized sector lately. The pandemic really hit them hard, nearly a crore people lost their jobs, especially workers and small traders. And then there's GST. The registration and compliance including income tax filing, record-keeping, GST filing are too complicated, and noncompliance may result in penalties. Many small businesses struggle to claim input tax credits (ITC), which forces them to sell at higher prices, reducing their sales.
In order to support unorganized businesses and workers, the Government of India has introduced various initiatives including
? Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
? Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM)
? PM Garib Kalyan Yojana (PMKY)
? E-shram portal
? PM Swanidhi
? Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
? Prime Minister’s Employment Generation Programme (PMEGP)
? Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
? A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
Now, let's talk about the organized sector. It's growing at a decent 7% rate, but it only employs 6% of the workforce. Moreover, automation and technology are steadily reducing the need for workers in both manufacturing and services. For instance, 30 years ago, Tata steel India used to employ 90,000 people and produce 2 million tons, but today it employs fewer people and produce 20 million tons. So, we need to grow the organized sector without undermining the unorganized sector. It's a balancing act.
Here are a few things we should focus on:
? Provide support systems for tiny businesses to ensure their survival and growth
? Conduct awareness programs to encourage micro companies to enter the formal economy
? Ensure farmers get Minimum Support Price that covers their full costs for Agriculture
? Support tiny businesses by forming cooperatives for marketing and financial assistance
? Set up more clusters to provide technology and infrastructure support
? Simplify GST regulations for tiny businesses, maybe even exclude GST at intermediate stages, like when they buy from suppliers and for transport
Here's the big picture: Small businesses are the solution to the challenge of unemployment. People with lower incomes spend every rupee they earn on necessities, which drives demand and boosts our GDP. This increased demand then encourages private investment in the organized sector. Ultimately, boosting small businesses is how we can quadruple our per-capita income to $15,000 by the year 2047 and move towards becoming a developed nation - "VIKSIT BHARAT".
#agricultureindia #msmeindia #clusters #ruralindia