Impact of Small and Medium Enterprises (SMEs) in Employment Generation and Economic Growth of Agra district

Abstract

Today, the idea of working on employment generation and economic growth through the crucial role of the small and medium enterprises in the leather industry of Agra is what this study discusses. Currently, Agra, with over 10,000 SMEs in the leather industry, is very bulky in specific aspects of the economy in India. It provides a huge workforce of nearly 3.5 lakh workers, with the remaining 65% share in domestic footwear production. Besides, with severe challenges like environmental regulations and competition in the global market, they remain the greatest livelihoods for the locals. A mixed-method approach: primary data from 255 respondents from the leather industry, along with secondary sources, that is an MSME report on overall export figures, have been analyzed in this research work. The most important finding cited here is that SMEs play a vital role in generating employment opportunities, with a proven positive correlation between SMEs and formalization of income growth, which means that poor formalization practices, coupled with environmental issues, hamper sector-wide growth. Such references within this study value inputs for policymakers to improve contributions of SME/enterprise in employment and economic development, besides bringing on targets on informality and sustainability. Recommendations for creating a better environment for SMEs in Agra\'s leather sector include strengthening training programs, working on issues of formalization, and adopting practices that promote the circular economy for future sustainable development of the industry in the region.

Introduction

Summary:

Small and Medium Enterprises (SMEs) play a crucial role in India’s economy, particularly in sectors like manufacturing, services, and exports. The leather industry in Agra, with a long history dating back to the Mughal era, is a significant example where SMEs contribute substantially to employment generation and economic growth. Agra hosts one of India’s largest leather clusters, producing goods like footwear and handbags for both domestic and international markets.

Despite their importance, Agra’s leather SMEs face challenges such as strict environmental regulations (notably due to the Taj Trapezium Zone), global competition from countries like China and Vietnam, outdated machinery, informal operations, and social issues like child labor. SMEs are vital for providing employment, especially to skilled and unskilled workers from rural and urban slum areas, and they are adaptable to market changes, which is critical in the fashion-driven leather industry.

The study focuses on assessing the impact of SMEs on employment and economic growth in Agra’s leather sector, examining their contributions, challenges, and potential strategies for sustainable development. Literature highlights managerial skill gaps, financing issues, inadequate planning, and technological shortcomings as major barriers to SME growth.

The research involves a structured survey targeting around 384 SMEs in Agra, using both qualitative and quantitative methods. Results indicate that SMEs significantly contribute to employment creation and local economic growth, though many are unaware of existing government support policies. Key challenges include lack of finance, poor management skills, and limited government support awareness. Respondents emphasized the need for enhanced funding, skill development, and government-private sector collaboration.

The study concludes that addressing these challenges and promoting policies supporting technological upgrades, formalization, and sustainable practices can help Agra’s leather SMEs become more competitive and sustainable, further driving economic and employment growth in the region.

Conclusion

In India\'s enormous and varied economy, the importance of Small and Medium Enterprises in generating growth, employment, and innovation cannot be undermined. These enterprises, generally neglected by all but the most ardent supporters, actually formed the backbone of any number of sectors, be it manufacturing, services, or export-oriented industries. The leather industry has an enduring stature, not only with respect to the history it represents and the economy it supports, but also for its future sustainable development. Agra, which is well-known for its picturesque landscape and industrial culture, hosts one of the largest clusters of leather in India, thus becoming the ideal place to study the impacts of SMEs on employment generation and economic growth.

References

[1] Ministry of Micro, Small & Medium Enterprises (n.d.). India\'s Footwear Industry. Retrieved from https://msme.gov.in/indias-footwear-industry [2] Cluster Diagnostic Report and Action Plan (n.d.). Leather Footwear Cluster-Agra. Retrieved from https://www.dcmsme.gov.in/tcsp/Program%20Overview/Agra_V2.pdf [3] Sharma, A., & Kumar, A. (2017). A Study on Factors Affecting Exports of Leather Footwear in and Around Agra. Amity Journal of Management, 6(2), 45-53. [4] MSME Enhancing Growth and Development of Leather Sector (2014). SME Times. Retrieved from https://www.smetimes.in/smetimes/in-depth/2011/Aug/02/msme-enhancing-growth-and-development-of-leather-sector625787.html [5] Council of Leather Exports (2022). UAE CEPA and India – Australia ECTA. Retrieved from https://leatherindia.org/wp-content/uploads/2023/03/CLE-Jun-2022-final1.pdf [6] Waardenburg, G. (n.d.). Small Scale Leather Shoemanufacturing in Agra: A Case Study in Small Scale Industry in India\'s Development. Retrieved from https://www.econbiz.de/Record/small-scale-leather-shoemanufacturing-in-agra-a-case-study-in-small-scale-industry-in-india-s-development-waardenburg/10000133697 [7] Department of Scientific and Industrial Research (n.d.). Leather & Footwear – Executive Summary. Retrieved from https://www.dsir.gov.in/sites/default/files/2019-11/3_0.pdf [8] Centre for Science and Environment (n.d.). CSE Releases Study on Waste Generated by Agra\'s Footwear Industry. Retrieved from https://www.cseindia.org/cse-releases-study-on-waste-generated-by-agra-s-footwear-industry-12356

Copyright

Copyright © 2025 Chhaya Verma, Prof. Poornima Jain. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.