Here is my piece in the August of Pragati-The Indian National Interest Review. Some excerpt:
- The Quick Results of 4th All India Census of MSMEs 2006-07, released in 2009, provides the most recent available data for MSMEs. According to this, the total MSME units are 261.02 lakhs comprising 15.53 lakh registered units (5.9 percent) and 245.49 lakh unregistered units (94.1 percent). Out of this, dalits (SCs) account for a total of 20.58 lakhs comprising 1.20 lakhs registered units (5.7 percent) and 19.38 lakhs unregistered units (94.3 percent). Similarly, MSMEs owned by STs account for a total of 8.29 lakhs comprising 0.47 lakhs registered units (5.7 percent) and 7.82 lakhs unregistered units (94.3 percent). Together, SCs and STs own a total of 28.87 lakhs MSME units (11.06 percent) (registered: 1.67 lakh and unregistered: 27.20 lakh).
- Out of the total units, only 70 percent are estimated to be working and others are either closed or not identifiable. It clearly seems that the prevailing rules and procedures are so hostile to any entrepreneurial activity as witness 90 percent of MSMEs remains unregistered.
- The Economic Census for 2005 (latest available) throws up some more interesting facts that seem to belie the economic backwardness of certain communities. For example, OBCs (Other Backward Classes) have a 27 percent quota in government jobs and educational institutions, yet they own 15.92 million units (out of a total of 41.82 million). The SCs with 15 percent reservation in government jobs and colleges, own 3.69 million units and STs run 1.52 million units. Out of a total of 6.08 million establishments in the farming sector, the share of OBCs was 2.81 million (46.24 percent), SCs was 0.61 million (10.08 percent) and STs was 0.38 million (6.32 percent). More than 93 percent of these units owned by OBCs, SCs and STs were in rural areas.
- Two vital issues emerge out of these statistics relating to dalits MSMEs. One, majority of MSMEs are unregistered. Two, more importantly most of the dalits owned MSMEs are in rural area. Therefore, the government decision to reserve MSME units for procurement has no relevance and thus decision taken clearly shows a political motive.