New Delhi, Jan 3 (KNN)  It is the small and medium enterprises which can generate “good quality employment”, said Prime Minister Manmohan Singh today, conceding that his  government has not been much successful in creating employment in the manufacturing sector.

“I am concerned that we have not been as successful as we need to be in generating employment in the manufacturing sector. This is an aspect of performance which we are working hard to correct. We need a much stronger effort in support of small and medium enterprises which can be a major source of good quality employment…”, he said addressing his press conference here.

However, learning from the past, the government would now give high priority to this aspect of creating jobs through support to the small and medium enterprises (SMEs). “Our manufacturing strategy gives high priority to this objective for the future”, he said.

The micro, small and medium enterprises (MSMEs) employ 59.7 million people and contribute to 45 per cent to the country’s manufacturing and 40 per cent to the exports.

The Prime Minister, said in his possibly last press conference before the next Lok Sabha elections that the government has also not been “as successful” in controlling persistent inflation as “we would have wished”.

But, he said, the government policies have led to higher wages in rural areas giving more purchasing power to the vulnerable sections.

The industry has been battling high inflation that has led to rising input costs while facing the demand compression. Several sectors have reported negative growth while investment has slowed down casting adverse effect on employment. (KNN/PC)