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Small businesses not reaping the rewards of PM Modi’s flagship ‘Make in India’ scheme



Analysts said that traditional and labour-intensive industries, like leather and textile, can help tackle unemployment better than the tech and services sectors.

In Agra, the indigenous leather industry is a key source of employment. It makes about 30 per cent of all leather shoes produced in India.

One of the biggest players is Dawar Group, which has more than 1,500 staff and sells its footwear both domestically and abroad.

The company said it has benefitted from the BJP government’s business-friendly policies, which include simplified processes to get permits, lower corporate taxes, and easier insolvency procedures.

However, the high cost of production for the labour-intensive sector means it is difficult to earn high profits.

Dawar Group founder Puran Dawar noted that the capital cost in India is much higher compared with other countries.

“The world is getting it at 0 to 2 per cent. We are working at 8 to 10 per cent, so futuristic growth or scaling up … it becomes a little difficult,” he said.

The problems are even greater for those dreaming on a shoestring budget. Mr Naval Kishore, who works in the Dawar factory, said schemes like “Make in India” do not apply to the poorest.

According to him, he failed multiple times in starting his own venture after working in the sector for decades. The authorities had cancelled his loan application, saying he was not generating any employment and needed to have a small business to begin with.

Small businesses in Agra’s famed leather market similarly said they feel mostly cut off from the scheme, having failed to reap any rewards from it.

Nevertheless, economists believe such policies will gradually help people like Mr Naval and small business owners.

“This question is linked to how quickly the effects of markets sort of trickle down all the way down to the hinterland that you’re seeing in the rural areas,” said Dr Rajat Kathuria, dean of the Shiv Nadar University’s School of Humanities and Social Sciences.

“Trickle-down happens on its own, but happens very slowly,” he added.


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