How do small and young firms fare in terms of job creation? The Economic Survey says the contribution of small firms to output and employment in the manufacturing sector is insignificant, though they make up around 85% of all firms. But it makes a crucial distinction: most young firms are small, but most small firms are not young, at least in the Indian context. It says the notion that small firms create jobs has prevailed because young firms, or “infants", which also happen to be small, generate employment, besides adding value to the jobs ecosystem. Small firms operating for over a decade typically destroy as many jobs as they create.

Source: Mint July 04, 2019 18:00 UTC