The Indian labor force is more than 500 million. A special feature of this labor force is the fact that it is heavily skewed towards the unorganized sector. The organized sector employs around 11-12% of the labor force. This leads to restriction in social security access to almost 90% of the labor population. Around 11% of the labor force, the organized sector is currently under pension cover leading to a crucial social security problem in the future.There have been a lot of half-baked solutions like the rural old age pension schemes, profession specific plans etc, that have been tried out in the past with limited results. Now is the time for the regulator to come up with a top-down policy based solution which will handle these two issues in a comprehensive manner.
- The cost of raising capital for SMEs was high.
- The existing means of financing were not adequate. SMEs did not have easy access to funds from VCs/PE players.
- The existing compliance costs associated with raising funds were high.