Abstract
There are two quite opposite views about rural non-farm informal enterprises (RNFIEs). First, it is low productivity sector producing low-quality goods, and the second one recognizes it as dynamic, flexible, innovative and contributing significantly in economic development. Based on National Sample Survey unit-level data (1999–2000 and 2010–11) and village-level household enterprise data, this chapter examines the employment and livelihood potential of RNFIEs in Uttar Pradesh. Though a higher percentage of informal enterprises have reported expansion, still more than half of enterprises are stagnant. These enterprises are essentially owned by illiterate, landless and middle castes having nothing else to do. Almost three-fourths of OAEs and more than half of establishments have GVA per worker below notional income which is a matter of major policy concern. Nevertheless, this study confirms that enterprise profit contributes significantly in household income and in the absence of this, household takes recourse to wage income, suggesting that RNFIEs are replacing casual work in households with enterprises. This study also questions aggregative method of studying RNFIEs.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
These regions vary in size—area as well as population. Therefore, any comparison of these regions has to take this into account.
- 2.
A multistage sampling method has been used to select districts and villages. Districts have been chosen based on the highest percentage of rural non-farm employment in total rural employment. Then, we have selected two blocks based on distance from the district headquarter so as to capture rural and urban differences. Finally, based on information collected at the local level, one Panchayat each from every chosen block has been selected and from each Panchayat one village has been chosen for survey.
- 3.
Notional minimum income = minimum floor level wage × working days per year × earning units per family. Therefore, two notional incomes for two years 1999–2000 and 2010–11 were required to compare GVA per worker of two rounds of NSS enterprises. The notional income was Rs. 15,289 and Rs. 36,702 in 1999–2000 and 2010–11, respectively.
- 4.
Nature of operations of enterprises is of three kinds, i.e. perennial, seasonal and casual. Enterprises that are run more or less regularly throughout the year are called perennial enterprises. Seasonal enterprises are those that are usually run in a particular season or fixed months of a year, while causal enterprises are run occasionally, for a total of at least 30 days in the last 365 days.
- 5.
NSS enterprise round does not provide information about operators of these enterprises. Therefore, this analysis uses primary data from our own survey, which did collect information about households. In fact, in this data, enterprises were tracked from household listing.
- 6.
Deshpande and Sharma (2013) found sharp gender disparity in ownership of firm.
- 7.
Singh (2012) reports similar result in his study of Income and Consumption Level of Farmers in UP. He found that among non-farm sample households, 80% household income comes from non-farm activities in which share of wage income is almost 55%.
- 8.
In fact, due to the impact of MGNREGA, wage rate has significantly increased in rural UP.
References
Bairagya, I. (2012). Employment in India’s informal sector: Size, pattern, growth and determinants. Journal of the Asia Pacific Economy, 17(4), 593–615.
Chen, M., Vanek, J., & Heintz, J. (2006). Informality, gender and poverty, a global picture. Economic and Political Weekly, 41(21), 2131–2139.
Deshpande, A., & Sharma, S. (2013). Entrepreneurship or survival? Caste and gender of small business in India. Economic & Political Weekly, 28(28), 38–49.
Dreze, J., & Sharma, N. (1998). Palanpur: Population, society economy. In P. Lanjouw & N. Stern (Eds.), Economic development in Palanpur over five decades. Oxford: Clarendon Press.
GoUP. (2009–2010a). Monitoring Poverty in Uttar Pradesh, A Report on the Fourth Poverty and Social Monitoring Survey (PSMS—IV), Government of Uttar Pradesh.
GoUP. (2009–2010b). Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).
GoUP. (2011–2012). Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).
GoUP. (2012–2013). Economic Survey, Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).
Jolliffe, D. (2004). The impact of education in rural ghana: Examining household labor allocation and returns on and off the farm. Journal of Development Economics, 73(1), 287–314.
Kabeer, N. (2012). Women’s economic empowerment and inclusive growth: Labour markets and enterprise development. SIG Working Paper 2012/1.
Lerche, J. (1995). Is bonded labour a bound category? Reconceptualising agrarian conflict in India. Journal of Peasant Studies, 22(3), 484–515.
Lerche, J. (1999). Politics of the poor: agricultural labourers and political transformation in Uttar Pradesh. Journal of Peasant Studies, 26(2–3), 182–241.
Maithi, D., & Mitra, A. (2011). Informality, vulnerability and development. Journal of Developmental Entrepreneurship, 16(2), 199–211.
Mishra, N. K., Raman, R., & Singh, U. B. (2013). Unpublished report on Dynamics of Growth of Rural Non-Farm Sector in Uttar Pradesh, Funded by University Grant Commission, submitted by Department of Economics, Banaras Hindu University, Varanasi.
Mishra, N. K., & Singh, U. B. (2015). Rural non-agricultural enterprises in Uttar Pradesh: Continuity and change. In S. Singh & D. Raina (Eds.), Society and development: Regional perspective. Jaipur: Rawat Publications.
Mitra, A. (2013). Can industry be the key to pro-poor growth? An exploratory analysis for India. ILO Asia Pacific Working Paper Series.
Mitra, A., & Pandey, A. (2013). Unorganized sector in India: Employment elasticity and wage-productivity nexus. Journal of Development Entrepreneurship, 18(4), 1350028 (1–19).
NCEUS. (2007). Conditions of work and promotion of livelihoods in the unorganised sector. National Commission for Enterprises in the Unorganized Sector (NCEUS), New Delhi: Government of India.
Papola, T. S. (1981). Urban informal sector in a developing economy. New Delhi: Vikas Publishing House.
Ranjan, S. (2009). Growth of rural nonfarm employment in Uttar Pradesh: Reflection from recent data. Economic and Political Weekly, 44(4), 63–70.
Schultz, T. P. (1988). Education investments and returns. In Handbook of development economics (Vol. 1). Elsevier.
Sharma, R., & Poleman, T. T. (1994). The new economics of India’s green revolution: Income and employment diffusion in Uttar Pradesh. Delhi: Vikas Publishing House.
Singh, A. K. (2005). Role of rural non-farm sector in rural transformation: Evidences from Uttar Pradesh. In R. Nayyar & A. N. Sharma (Eds.), Rural transformation in India: The role of non-farm sector. Institute for Human Development.
Singh, A. K. (2012). Income and consumption level of farmers in Uttar Pradesh. Unpublished Project Report funded by Dept. of Planning Government of Uttar Pradesh submitted by Giri Institute of Development Studies, Luknow.
Srivastava, R. S. (1996). Agrarian change and the labour process. In P. Robb (Eds.), Meanings of agriculture: Essays in South Asian history and economics. Oxford University Press.
Srivastava, R. S. (1999). Rural labour in Uttar Pradesh: Emerging features of subsistence, contradiction and resistance. Journal of Peasant Studies, 26(2–3), 263–315.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Appendix
Rights and permissions
Copyright information
© 2019 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Mishra, N.K. (2019). Employment and Livelihood Potential of Rural Non-farm Informal Enterprises. In: Mamgain, R. (eds) Growth, Disparities and Inclusive Development in India. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-6443-3_14
Download citation
DOI: https://doi.org/10.1007/978-981-13-6443-3_14
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-13-6442-6
Online ISBN: 978-981-13-6443-3
eBook Packages: Economics and FinanceEconomics and Finance (R0)