Generations of students of Economics grew up reading ‘Small is Beautiful: A Study of Economics as if People Mattered’ by the German born British Economist E F Schumachar. Published in 1973, the book champions small, appropriate technologies that empower people more than large scale units working on technologies that have a lower employment potential.

Ever since the book was written the debate over appropriate technology has never ceased. But the debate notwithstanding and logical intricacies aside, it is now statistically and experientially accepted that the ability of MSMEs, both in formal and informal sector, generate more employment per unit of investment than their big brothers.

The story in India is no different. The data available from the latest annual reports of the Union Ministry of Micro Small and Medium enterprises show that the sector provided 39 lakh 36 thousand 788 crore rupee in 2015-16 by way of gross value addition. The growth clocked was 7.62 per cent with the share in the total value addition being 31.6 per cent. The GDP share of the sector was a substantial 28.72 per cent. The current Economic Survey provides the same accolades to the sector by counting its contribution to the export at more than 40 per cent.

According to a KPMG survey in the East and North East the informal manufacturing sector keeps contributing more than 60 percent to the SGDPs. According to the ministry concerned, generation of employment by the sector in the FY 2017-18 is estimated to be 85,792.

The CMIE in its February, 2018, report says that 31 million unemployed are searching for jobs. Keeping this in mind and the potential of job creation per unit of fixed asset in the sector, MSMEs are becoming our bet as a development driver with MFIs acting as their financial consorts.