Micro-enterprise: Solution to Make the Informal Sector Self-reliant


Shilpa, Co-owner of Apparel Micro Enterprise, Hosur

A vast majority of the workforce in the country seeks employment in the informal sector. There are many committees and bodies set up by the government which promotes self-employment. In urban areas, we have witnessed the growth of many new startup companies. These startups are diversified across different sectors like Information Technology, Finance, Marketing, e-commerce, and so on. Likewise, in semi-urban and rural areas, the government initiatives have led to a higher number of small entrepreneurial ventures or in other words, Micro-enterprises.

As per legal connotations of the Ministry of Micro, Small and Medium Enterprises, a Micro-enterprise is defined only on the basis of the investment involved in setting up the operations. Owing to the broad definition, most of the self-employed sector forms part of a Micro-enterprise. Micro enterprises are relatively easy to set up and can be very beneficial in the long run, if done the right way. The only predominant requisite of such enterprises is the availability of skilled labour. Many government and non-government bodies are taking initiatives which would improve the quality of labour. Some initiatives include providing advanced training in trade skills and offering career enhancement courses. Many social and non-government organizations are assisting workers from the informal sector. These organizations provide training workshops and certification courses which help these people become organised and self-sufficient.

In a semi-urban district in Tamil Nadu, around 25 housewives appeared for an advanced trade skills program conducted by LabourNet. They were provided with training and certification in skills in tailoring. They were also given additional support by way of marketing links and operational assistance. Slowly a stable micro-enterprise emerged with the help of these initiatives. Creating micro enterprises can be of great help to not just the informal sector but also to the country as a whole. With more people becoming self-reliant, it is needless to the say that the whole country gets on the path to progress.

Many of the people from rural and semi-urban areas are undergoing multiple training programs for trade skill, soft skill and basic financial skill improvement and use them commercially albeit on a very small scale. With the alternative to work as a freelance service provider, micro-enterprise guarantees a sustainable means of earning a livelihood.

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Many corporate giants, in partnership with implementing agencies, are also actively promoting the creation of micro-enterprises. Some organizations have even taken steps to integrate such enterprises with their day to day operations. For instance, Hindustan Unilever has adopted a supply chain strategy that not only increases the coverage of its products but also promotes an integrated Micro Enterprise distribution system.

An integrated micro enterprise combines a vast number of micro and small scale enterprises across different demographics that collectively operate as medium scale or large scale business. HUL has expanded its distribution systems to cater to remote and small villages in the country. The corporate giant implemented an initiative called ‘Project Shakti.’ Project Shakti successfully mobilized around 40 thousand women across the country and assisted them in setting up their own entrepreneurial venture. With these small enterprises, HUL was able to supply its products to several distant and small villages.

Not only did Project Shakti improve the distribution channels of HUL, but also provided the micro-enterprise sector with a much-needed boost. Presently, LabourNet has adopted a similar model by incubating small-scale micro-enterprises with the goal to bring them into the fold of an integrated micro-enterprise.

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