Nilekani: Small Business to Drive India's Job Growth
08 Aug 2026
Big Firms Beware, Small Business Booms: Nilekani's Warning at NCAER Policy Forum
Speaking at the NCAER India Policy Forum 2026, Infosys co-founder Nandan Nilekani delivered a pointed warning to India's corporate giants: the very structure that made them efficient could now make them vulnerable to job losses, while millions of small businesses step in as the country's primary employment engine.
The Core Argument
Nilekani's thesis centers on task automation. "Large companies, which are very well structured, will actually be the most vulnerable to job loss, because every job is reduced to a few set of tasks," he said. In other words, the same organizational clarity that makes large corporations scalable also makes their work easier to automate or restructure — a dynamic he believes will accelerate net job losses at big firms in the years ahead.
In contrast, Nilekani pointed to small businesses as the sector best positioned to absorb and generate employment going forward. He framed this as a fundamental shift requiring new thinking: "We really have to rethink how job creation will happen."
The Numbers Behind the Shift
The scale of India's startup ecosystem underpins this argument. The country currently counts roughly 150,000 startups — a number Nilekani's remarks suggest is projected to grow to one million by 2035. That trajectory implies a labor market increasingly organized around smaller, more distributed enterprises rather than large corporate employers.
Policy Prescriptions
Nilekani didn't stop at diagnosis. He called for large-scale deregulation and simplified business interfaces to ease the path for small business formation and operation. He also advocated for portable benefits and portable credentials — mechanisms that would let workers carry protections and qualifications with them as they move between gigs, contracts, and small employers rather than staying tied to a single large company.
These policy calls point to an underlying risk: without such changes, the report notes, the transition toward a small-business and gig-driven labor market could leave structural gaps in worker protections, since traditional benefits and credentialing systems were built around long-term employment at larger, stable employers.
What's Missing From the Picture
Several important details remain unspecified. There's no defined time frame for when large firms are expected to become net job losers — Nilekani referred only to "coming years." No data was provided comparing current employment shares between large firms and small businesses, and no specifics were given on what "large-scale deregulation" or "simplified business interfaces" would actually entail. Similarly, there are no details yet on how portable benefits and credentials would be funded or implemented, nor which sectors or firm sizes would be most affected.
Why Founders Should Care
For early-stage founders, this forecast carries several probable implications, though the specifics remain uncertain:
- Talent flows may shift. If large firms do become net job losers as automation reduces roles to discrete tasks, displaced talent could increasingly flow toward startups and small businesses — potentially easing hiring for founders competing with corporate employers for skilled workers.
- New market opportunities in small-business infrastructure. The projected jump from 150,000 to one million startups by 2035 suggests growing demand for tools and services that support small business operations — compliance, HR, payroll, and benefits administration are plausible growth areas.
- Gig-economy platforms could see policy tailwinds. Nilekani's push for portable benefits and credentials hints at possible regulatory movement that could legitimize and support platforms serving contract and gig workers, though no implementation details exist yet.
- Regulatory easing may lower entry barriers. Calls for deregulation and simplified business interfaces could, if enacted, reduce friction for new business formation — a potential tailwind for founders navigating India's regulatory environment, though what this deregulation would specifically involve is not yet clear.
None of these outcomes are guaranteed. The timeline for large-firm job losses is undefined, and the policy changes Nilekani advocates for have not yet been detailed or enacted. Founders should treat this as an early directional signal rather than a confirmed market shift — one worth monitoring as India's policy conversation around jobs, automation, and small business support continues to evolve.