Question 1 · 10 marks · 141 words written
Opening · a definition
"Missing middle" refers to phenomenon in which either big industrial units perform or smaller ones with "middle" companies stagnant role in industrial ecosystem. Impact on economic growth & unemployment
Body · points and prose
pport to MSME → reason for dwarfism (Eco survey)
- Lack of infrastructure (power, connectivity to grid)
- Economies of scale - with big industrial player → distorts cost competitiveness of smaller firms
- Global competitiveness - from cheap chinese imports
Impact on economic growth & unemployment
Hindrance to inclusive growth - as not enough job is created in industrial sector (eg 8.3% unemployment rate)
Lack of women participation - in labour force due to missing middle (only 37% female LFPR - as PLFS-2022-23)
Informalisation of economy - 90% of India economy is informal due to missing 'middle' industrial sector
Rise in gig economy - as no formal jobs is created (Around 77 lakh jobs in gig economy - NITI Aayog)
Capital intensive instead of labour intensive growth - leading to "jobless" growth in India.
Close · a way forward
MSME need to be promoted to fulfil "missing middle" based on UK sinha committee, to attain $5 trillion economy.