Archive · 10 Dec 2025
India's Small Enterprises Key to Job Growth
India has many small businesses that operate with low capital and technology.
These businesses employ a lot of people, but they don't grow much because they lack access to credit and technology.
The government needs to help these businesses grow by making it easier for them to get loans and use digital tools.
When these small businesses grow, they can hire more people, which will create more jobs in India.
The article suggests that focusing on these small businesses is more important than just creating a few large factories.
India's small enterprises employ over 12 crore workers in 7.3 crore enterprises, but their growth is constrained.
Own Account Enterprises (OAEs) make up 87% of non-agricultural enterprises and have low productivity.
Hired Worker Enterprises (HWEs) generate 7.5 times more gross value added (GVA) than OAEs.
A 10% increase in GVA is associated with a 4.5% increase in hired workers, highlighting the importance of small business growth.
Access to formal credit and technology adoption is crucial for the growth and job creation potential of small enterprises.
- Who
- India's small enterprises and workers
- What
- The potential for job growth through improving productivity of small enterprises
- When
- 2023-24 (data from ASUSE)
- Where
- India
- Why
- To address the fundamental challenge of self-employment and low productivity in small enterprises
- Total Workers in Small Enterprises
- 12 crore
- Total Enterprises in 2023-24
- 7.3 crore
- Percentage of Own Account Enterprises (OAEs)
- 87%
- GVA of Hired Worker Enterprises (HWEs) vs OAEs
- 7.5 times higher
- Percentage Increase in Hired Workers with 10% GVA Increase
- 4.5%
- Percentage of Enterprises with Outstanding Loans
- 10–12%
- GVA Increase for Medium-Sized Enterprises with Credit Access
- 72%
- GVA Increase for Large Enterprises with Credit Access
- More than threefold
