FICCI, Azim Premji University recommend 18 lakh Udyog Sahayak Enterprises network to assist MSEs

An industry-academia collaboration has submitted a new policy proposal to Narendra Modi government to create Udyog Sahayak Enterprises Network (USENET) that provides a bouquet of services to micro and small enterprises (MSEs) of the country. The scheme envisages establishment of around 18 lakh Udyog Sahayak Enterprises (USEs) in three phases to service over 60 million MSEs over a period of ten years.

The report, prepared through a collaboration between Azim Premji University, Federation of Indian Chambers of Commerce and Industry (FICCI), and Tata Institute of Social Sciences, Mumbai, proposes the creation of a support system that will improve Ease of Doing Business for largely informal micro and small entrepreneurs. Each single person manned Udyog Sahayak Enterprise (USE) will comprise of a mobile unit (motor bike) and a small home office with basic infrastructure like computer/laptop, printer, scanner, web camera, broadband connectivity and suitable power backup for uninterrupted delivery of services.

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Udyog Sahayak Entrepreneurs will be educated youth with 12th pass or graduate degrees who will be trained by the existing skilling ecosystem of the Skill Development and Entrepreneurship Ministry. Thus, the programme creates sustainable livelihoods for 18 lakh educated youth, in addition to enabling MSE growth and indirect job creation and consequent economic growth, the report said.

The report proposes a one time government subsidy directly to the infrastructure suppliers. "Each USE will require a capex of Rs 1.14 lakh of which 50 per cent is a grant from of GoI. 80 per cent of working capital requirement will come in the form of a MUDRA loan," the report said.

The services offered to the micro-entrepreneurs at their doorstep will include digitisation and formalisation, availing of government loans, subsidies or other benefits, ensuring compliance with local, regional, and national regulation, aiding partnership with digital marketing platforms and digital payment platforms.

The authors estimate that by enabling scale-up, USENET can aid in the creation of an additional 1 crore (10.3 million) jobs over five years going up to nearly 6 crore (56.9 million) over 10 years. Based on value-added per worker observed in this sector and assuming a 12 per cent nominal rate of growth in GVA, these jobs represent an additional economic value of Rs 2.16 lakh crore at the end of 5 years and over Rs 19 lakh crore at the end of 10 years, the report said.

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Presenting the policy proposal, T Muralidharan, Chairman of FICCI Telangana State Council and co-author of the report, underlined the problem of "jobless growth" and pointed out that we are in danger of losing our demographic dividend. He called for giving micro-entrepreneurs their due recognition in the making of the nation.

Amit Basole, report co-author and faculty member at Azim Premji University, noted that "rather than creating more nano-entrepreneurs, we need to help existing MSEs to grow in size. We can do this by creating a support system which enables them to go digital, avail of government schemes, adopt new technologies, and increase productivity. This will create millions of new jobs."

This proposal was developed for the Working Group of Ministers (WGoM) on Employment and Skill Generation, convened by MoS Home Affairs of Government of India in October 2020. It has been submitted to the Prime Minister along with other proposals developed by the group.

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