New Delhi, Oct. 8 -- India's IT services sector has been a star performer. It has turned raw engineers into seasoned professionals and seized contracts and opportunities across the globe. On the other hand, India's small and medium enterprises (SME) sector is the silent backbone of the Indian economy. If IT is about a fewer number of firms with millions of employees, the SME sector is all about millions of firms each with a smaller number of workers. Together, they offer two lenses on India's growth story. Both contribute to making India the fourth largest economy in the world -- a point of fact that has been fashioned into a matter of pride.

But this happy story has a twist to it. Seen through the lens of layoffs that are now in the new...