Small things matter: The tiny sector Bhattacharya Amit M.* PhD (Economics), MBA (Finance), Director, Research, Innovation and Development Associates [RIDA], Kolkata-700156, West Bengal, India *Email id: amitmbhattacharya@gmail.com, rida18660@gmail.com
Online Published on 18 July, 2023. Abstract The phenomenal explosion in poverty and inequality in India due to ‘demonetization’ ruined the gigantic unorganized sector to the extent, and sudden and unsolicited implementation of GST ruined the small business and forced the big businesses to find newer ways of tax evasion, transactions through ‘Hawala’ and crypto currencies and so on, and Covid-19 pandemic helped the Gig economy growing exponentially thereby bringing down millions of middle-class to low-income class people to their knees. The huge chunk of BPL (earning $1 a day) leapt to 50 crores and the number of poor people earning $5.5 a day gone up to another 40 crores in a land having a ‘population size of 1,412,903,336 as of Wednesday, December 7, 2022. In a capital-starved and ‘minimum governance’ country, people were left with no alternative but to survive on subsistence income forced upon by aforesaid man-made disasters/ disruptions. India witnessed cruel scenes like the retrenched laborers walking down thousands of miles barefoot to their native places, yesterdays’ business executives working for Zomato, Swiggy, Flip kart, Amazon and so on supplying food and other articles from door to door on commission basis and even chefs of merchant naval ships running the roadsides food carts as cliff-hangers. With less option, they liquidated their provident funds, fewer deposits and then borrowed money at high costs to ensure daily liquid income for meeting their both ends. Although, few unemployed people remained successful in restarting their lives by establishing medium- and small-scale industries; majority of them were pushed into ‘tiny sector’ activities (that required primary investment of Rs. 0 to Rs. 50,000/- only) just for earning tax and legal binding-free income of around Rs. 500–800 per day. The issue of Rs. 0 investment meant opting for life/general insurance agency to driving TOTO and Uber/Ola vehicles to organizing micro-tourism and so on that could fetch survivable money regularly. The biggest advantage for the tiny entrepreneurs is that they work almost within ‘competition-free’ ecosystem. The purpose of the study is to assess the ground level reality of the tiny sector enterprises and potential in transforming national economy provided they are given favorable ecosystem. For this, the author undertook descriptive and empirical method and minutely studied the situation and also promoted a number of such units to measure the impact on the attitudes and lives of the tiny entrepreneurs. The author also helped arrange for micro-tourism within 100 km radius of Kolkata to gauge the profit margin through zero-sum investment. The result of the study was marvelous. It was found that the ‘tiny’ entrepreneurs created such miraculous forward and backward linkage effects that Covid-19 devastated economy witnessed impressive ‘turn-around’ within the short span of time. The limitation of the study is that being it self-funded one; the author could opt for the places in and around Kolkata city only. This sort of activities and studies have deep impact on the socio-economic environment pan-India as the tiny sector activities are mostly function in the unorganized way but has tremendous capacity of up-lifting the life-style of the teeming millions. The study is original one and supported by valuable references. There is no conflict of interest in the study undertaken. In 1976, UNIDO had perceived that India was still suffering from backward agriculture sector and vast non-working population; hence, it was better to give priority to the development of tiny sector and ‘establishing a new kind of society than reforming the old. Such actions would bring equality, social transformation, higher levels of employment, more equitable distribution of income and well-balanced regional development.’ Although ‘a total of Rs. 19.22 trillion loans have been sanctioned to 353 million borrowers under the PM Mudra Loan scheme in 7 years since inception and Rs. 46,053.39 crores only or 3.3% has fallen in bad loan (NPA) category, it may be accepted as commendable achievement. However, no record for the loans disbursement in ‘tiny sector’ is compiled by any agency yet. This indicates toward negligible financial support for this ‘vital sector’ as they operate unorganized and cannot produce formal documents to the formal financing agencies. However, these unorganized ‘robust players’ regularly add-up sizable percentage to Gross Domestic Product and in export activities too. Top Keywords Per capita income, Originally duplicate, PM Mudra Loan, Tiny sector, Vital sector. Top |