The Impact of Government Schemes on Employee Engagement in SMEs

Abstract

The role of small and medium enterprises (SMEs) is very important in the Indian economy because of their immense contribution in terms of employment opportunities, production capacities and exports. The small sector employs millions of people in developing nations such as India, where labor is abundantly available but getting capital for business is most difficult. The micro, small, and medium enterprise (MSME) sector in India contributes considerably to the country's industrial output, employment, and exports. Lekshmi and Rathiha (Int J Trend Sci Res Dev 2(1):1033–1038, 2017) through their research examined the economic impact of the MGNREGA plan on the lives of beneficiaries in the Thiruvananthapuram district, the findings demonstrated that the programme had a positive impact on the beneficiaries lives. According to the MSME report of 2021, during 2014–15 to 2018–19, Manufacturing MSMEs’ contribution to the country's overall Manufacturing GVO (Gross Value of Output) at current prices remained steady at around 33%, with manufacturing employing 32% of the workforce (Bhavan in Ministry of micro, small and medium enterprises, 2019). The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the Midday Meal Scheme, Anna Bhagya Yojane, and Indira Awaas Yojane, among others, have been introduced by the central and Karnataka governments to promote the socio-economic well-being of the poorer sections of society. During the discussion, some SMEs owners voiced concern that government support programmes for those living below the poverty line (BPL) are having a negative impact on the working environment. It is stated that managing Human Resources (HR) becomes difficult after the implementation of government programmes. The backward bending labor supply curve states that when a worker's wage rises, he will get wealthier. This rise in money causes people to consume more of everything, including leisure, reducing the number of hours they labor. As a result, the focus of this article is on the influence of such programmes on employee management in SMEs in Hubballi, with the hope of raising awareness about the impact of such government programmes on compensation, absenteeism, attrition of employees of SME and impact on employee management concerns among the employers.