Why giving Gadkari the MSME ministry may be a most inspired decision

The MSME sector, despite its potential, defies a single solution. Yet, there is no doubt that if India has any hope to get a strong handle for growth of employment, this is the sector to look to

The allotment of the Ministry of Micro and Small Enterprises in Prime Minister Narendra Modi’s new Council of ministers to Nitin Jairam Gadkari, in addition to the road transport and shipping portfolio, is not surprising. As a ballast for employment generation in the economy, the role of the MSME sector is massive, but it has underperformed. Significantly, in the past two decades, no minister so senior in the protocol has been awarded this ministry. Gadkari ranks fourth in the Cabinet.

In the past five years, almost every time the government has faced a challenge in some sector of the economy, it is Gadkari to whom Modi has turned. He has, to use a cliche, been a sort of champion for sputtering causes in the National Democratic Alliance (NDA) government.

Of these, the most recent was a turnaround in cleaning of the Ganga river, which personally rebounded to the credit of Modi in Varanasi. At a larger level, the demonstration effect of the river cleaning was dramatic. It finally seemed plausible that India’s challenge to get its rivers as viable pieces of economic trunk routes would fall into place. The creation of the new omnibus ministry of Jal Shakti in the Union council of ministers sworn in on Thursday, combining all the water-related departments — Namami Gange, drinking water and irrigation into one place is a testament to this achievement.

Similarly, in 2014, when Gadkari walked in as the minister for road transport and highways, the pace of construction had dipped to just about 12 kilometres per day. Construction companies had abandoned projects in droves and it was difficult to figure out how the sector could be revived. From there, the pace of construction of roads in 2019 reached over 32 kilometres a day. Investment reports are clear that the road sector has acted as a major investment multiplier for the economy — and at times been the only one for a fiscally constrained economy. Signature projects like the new bridge over the mighty Brahmaputra or the East and West Peripheral Expressways ringing the NCR have been the visible demonstrators of these initiatives. This is where the usefulness of Gadkari comes in.

It is of course a big challenge to presume that Gadkari can do the same turnaround for the MSME sector. The sector, despite its potential, defies a single solution. Yet, there is no doubt that if India has any hope to get a strong handle for growth of employment, this is the sector to look to. The National Sample Survey’s 73rd round estimates that in 2015-16 the MSME sector created 111 million jobs, of which 36.04 million were in manufacturing and another 38.72 million in trade in both rural and urban areas across the country. It ranks second only to agriculture, and there is no doubt that it has to rebound for the growth rate of the Indian economy to climb.

Gadkari has a penchant for crafting innovative solutions to economic governance issues. Plus, he is known as one to speak his mind, often to the perceived embarrassment of the party. Unless one presumes that this is one of the reasons for the allotment, since the MSME sector has always been the Waterloo of ministers in NDA or the United Progressive Alliance before it, this could be a most inspired decision by Narendra Modi in his list of ministers. A lot will ride on whether Gadkari can change the history of the MSME sector.