India must embrace growth of small firms into giants: IMF Executive Director Subramanian

India must not look down or frown upon small firms growing into giants or bigger entities, Krishnamurthy Subramanian, Executive Director at International Monetary Fund (IMF), said on Tuesday.

“Not wanting companies to grow big is not right approach if we want to create jobs in the Indian economy,” Subramanian said here after launching OMI Foundation’s report on social protection for platform economy.

“Entrepreneurs when they create companies that grow, they are really serving the nation. Some commentators have vested interests in going after industrialists (that are growing big),” he said.

It is important to recognise that growing companies create welfare for the country, he said.

“We need to have companies that are growing and encourage children that become giants and not those that remain dwarfs,” Subramanian said.

Subramaniam also highlighted that the platform economy in India is serving the consumer the country far better than the situation in the US.

“We are just getting started. We are the third largest platform economy in the world. Given the kind of public digital infrastructure we have created in India, the potential for platform economy is humongous. This is one aspect that India can crow about in the IMF Board,” he said.

He noted that there is a perceived truism that small firms create jobs. “We have to make a difference between children that grow to become giants and those that remain dwarfs,” Subramanian.

“If we have an entrepreneur that can grow big, that is the best national service you can provide. There cannot be a better national service.”

Meanwhile, the OMI report titled ‘Social Protection in India’s Platform Economy: Unpacking Supply Dynamics’ has outlined the diverse range of social protection benefits available to platform workers in India. Engaging with 10 prominent platforms boasting a collective FY 2023 revenue exceeding ₹56,400 crore and serving over 45.5 lakh platform workers, the report offers a comprehensive understanding of the landscape.

Aishwarya Raman, Executive Director, OMI Foundation, stressed the need for new-age and collaborative strategies to afford platform workers comprehensive and meaningful social protections.

“By leveraging digital technology and innovative social security solutions, India can pave the way for sustainable and inclusive worker benefits. Designing a social protection framework that simultaneously enhances worker welfare and supports a conducive environment for businesses is essential. By achieving this synergy, we can tailor a model for India’s platform economy that not only benefits the domestic landscape but also serves as a model for the global south.”