High employment intensity in service-sector MSMEs

CRISIL has analysed the employee strength of 1,400 micro, small, and medium enterprises (MSMEs) in the service sector in 2012-13 (refers to the financial year, April 1 to March 31). The study was conducted to compare the employment generation potential of various industries in the service sector. The results indicate that employment-intensity is highest in manpower-intensive services like security agencies, housekeeping, and facility management.

After manpower-based services, the top five service industries - in the order of their employment-intensity -- are automotive dealers, education services, logistics services, media-advertising and IT services. These industries provide job opportunities to skilled as well as semi-skilled manpower. MSMEs in the service sector are key contributors to India's GDP. These enterprises merit strong policy support and incentives for their growth, keeping in view their employment generation potential.

Note: The analysis is based on the latest audited financial statements and information of CRISIL-rated MSMEs. CRISIL rates over 50,000 MSMEs in India. The sample does not include key service sectors such as banking, financial services, and insurance (BFSI), as these activities are generally not undertaken by MSMEs owing to the small size of their operations. This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy.