Karnataka among top three in employment

Karnataka among top three in employment

Karnataka’s presence in the top three highlights the critical role that the state has played in generating employment, the report said.

Analysis also reveals that enterprises in the civil construction and agri-food processing industries are more employment intensive than MSMEs in other industries in the state. Talking to Deccan Herald, CRISIL Ltd Head, SME Ratings Yogesh Dixit said MSMEs in Karnataka outperform their peers in other southern states, and are among India’s top five states in business strength, management competence, and financial soundness.

The credit risk profiles of MSMEs in Karnataka are supported by their promoters’ strong entrepreneurial track record, longstanding relationships with customers, well-defined organisation structure, superior profitability and capital efficiency, he added.

Around 30 per cent of MSMEs rated by CRISIL are from industries such as engineering, electrical equipment, agri-food processing, steel and steel products and civil construction. Most rated enterprises are from the cities, including Bangalore, Mangalore, Belgaum, and Mysore.

CRISIL expects industries such as information technology, pharmaceuticals, and trading to constitute sizeable chunks of its rated universe, in future, with a greater representation from enterprises in smaller towns.

Beats national average

A comparison of of enterprises in Karnataka with the national average indicates that the state outperforms the all-India average on all three indices. In terms of business strength, enterprises in Karnataka have long track records and strong relationships with customers. They have demonstrated ability to mitigate the impact of concentration risks arising from excessive dependence on a single product, market, region, or customer.

On management competence, Karnataka is among the top three states in India. Their performance is supported by the long entrepreneurial track record of their promoters, well-defined organisation structure, and promoters’ inclination to acquire higher qualifications.

In terms of financial strength, state-based MSMEs score high on profitability and capital efficiency. CRISIL believes that enterprises in the state can further augment their financial risk profiles by improving their liquidity and shoring up their capital bases by infusions of funds.