Article ID: MTJPAM-D-24-00090

Title: Mitigating the issue of unemployment through entrepreneurship development in MSME sector of India: A mathematical model analysis

Montes Taurus J. Pure Appl. Math. / ISSN: 2687-4814

Article ID: MTJPAM-D-24-00090; Volume 6 / Issue 3 / Year 2024, Pages 517-531

Document Type: Research Paper

Author(s): Debadatta Adak ^a, Shekhar Das ^b

^aDepartment of Mathematics, Maharaja Bir Bikram University, Agartala, Pin Code – 799004, Tripura, India

^bDepartment of Mathematics, Maharaja Bir Bikram University, Agartala, Pin Code – 799004, Tripura, India

Received: 25 June 2024, Accepted: 25 January 2025, Published: 31 July 2025

Corresponding Author: Debadatta Adak (Email address: ev.adak.math95325@gmail.com)

Full Text: PDF

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Abstract

Entrepreneurship ventures in Micro, Small and Medium Enterprises (MSMEs) are the crucial components of India’s economic growth and development. In 2020 – 2021 MSMEs has contributed almost 30% in India’s GDP. MSMEs provide an essential platform to unemployed youths to venture in various small scale business opportunities using mostly the indigenous infrastructure and production models resources. By creating own MSME company a previously job seeker becomes a job giver to the other unemployed individuals. Unemployment is another important socioeconomic issue in India. After agriculture, MSME sector of India is the largest employment generator employing almost 15 million people all over the country. Therefore, by developing adequate entrepreneurship ventures in MSME sector the unemployment issue of India can be mitigated. The main objective of this article is to assimilate the dynamics of MSMEs to resolve the challenges of unemployment by creating jobs in new MSME entrepreneurships. For that purpose, we have proposed a deterministic mathematical model using nonlinear differential equations and analyzed it analytically as well as numerically. The model parameters have been estimated using real data set. The sensitivity analysis of the parameters has also been performed using PRCC method. It has been found that the rate at which an unemployed individual becomes an MSME entrepreneur with proper skills and training, the governmental schemes to financially support the MSMEs and the rate of generation of employment in MSME sector can significantly alter the system dynamics. Moreover, during COVID – 19 pandemic the rate of at which MSMEs were closed due to financial crisis & lockdowns and the rate at which MSME employees lost their jobs are also important regulators of the issue of unemployment. The results obtained through this study can be helpful to constitute the future financial policies related to the development of MSME sector of India.

Keywords: Unemployment, entrepreneurship, MSME, mathematical model, data fitting, sensitivity analysis, numerical simulations

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