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A troubling snapshot of Indian manufacturing (solution (Improving physical…

- - - - 131.29 million people are employed in
        58.5 million establishments in industry and services.
      - Only 21% of the enterprises employ 10 or more workers
      - managed entirely by their owners and didn’t employ any other workers, constituted almost 45% of the enterprises
    - - They suffer from low productivity given that their small size prevents them from achieving economies of scale, among other disadvantages.
      - however they employ a huge chunk of the labour force
        
        underemployment : as stated by niti ayog vice chairman aravind panagaria
        
        low production and high labor = low wages
        
        The wage spread between small and large enterprises is a disquieting 80%.
      - why dwarfing occurs?
        
        Large firms with larger workforces face a greater regulatory burden
        
        diminishes efficiency
        
        incentive for smaller firms to cap their workforce below the point where onerous regulations kick in
        
        informal labor
        
        similar issue exists in china
        
        sme dominates 75% workforce
        
        domination of larger enterprises creates an ecosystem where small firms must perforce improve productivity
        
        whether to compete or take advantage of the downstream opportunities created by larger firms
- - - - Most of the young enterprises are located in Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh and Telangana. Concurrently, unlike in other states, older manufacturing firms in Andhra Pradesh, Telangana, Maharashtra and Gujarat face a lower regulatory burden than younger firms. The latter are thus disadvantaged in the states where they are highly concentrated, creating a barrier to growth and productivity—perhaps a legacy of crony capitalism in states that have traditionally been more enterprise-oriented, with larger firms more effectively able to utilize these networks.