widening exclusion: informalisation in the indian economy ravi srivastava
TRANSCRIPT
Widening Exclusion: Informalisation in the Indian
Economy
Ravi Srivastava
Emp. In Organised Manufacturing (ASI)
0
4
8
12
Millio
ns
Total Employment Total Workers
Organised Sector Employment (DGET)
0.00
50.00
100.00
150.00
200.00
250.00
300.00
(Lak
hs)
Pvt Man.
Pub. Man
Pub+Pvt Man
Pvt Total
Pub Total
Pub+Pvt Total
% of Emoluments & Wages to GVA in Org. Man.
0
510
15
2025
30
3540
45
1981-82 1991-92 2003-04
Emoluments/GVA Wages/GVA
Share of Unorganised Sector in Employment and Value
Added: All India (DGET, CSO)
Year Share of Unorganised Sector in (per cent)
Employment Gross Domestic Product
1 2 3
1977-78 92.2 68.1
1982-83 92.0 66.4
1987-88 92.2 63.0
1990-91 92.2 63.8
1993-94 92.7 62.3
1999-2000 93.0 59.2
2002-03 - 56.7
NCEUS definition
Unorganised Sector“The unorganized sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers”
Unorganised Worker“Un-organized workers consist of those working in the un-organized sector or households, excluding regular workers with social security benefits provided by the employers and the workers in the formal sector without any employment and social security benefits provided by the employers”
Total workforce in agriculture and non-agriculture sector by activity status in 1993-94, 1999-2000 and 2004-05 (million)
Activity Status Agriculture Non-agriculture Total
1993-94
Self-employed 143.19 60.94 204.13
Regular wage workers 3.31 47.83 51.13
Casual employee 91.84 27.22 119.06
Total 238.34 135.99 374.33
1999-2000
Self-employed 137.28 70.93 208.21
Regular wage workers 3.46 55.59 59.05
Casual employee 96.93 32.57 129.50
Total 237.67 159.09 396.76
2004-05
Self-employed 166.18 92.07 258.25
Regular wage workers 2.83 66.72 69.55
Casual employee 89.91 39.75 129.67
Total 258.93 198.54 457.46
Growth rate of workforce in agriculture and non-agriculture by activity status between 50th, 55th and 61st NSSO Round
Activity Status Agriculture Non-agriculture Total
1993-94 and 1999-2000
Self-employed -0.70 2.56 0.33
Regular wage workers 0.75 2.54 2.43
Casual employee 0.90 3.03 1.41
Total -0.05 2.65 0.97
1999-2000 and 2004-05
Self-employed 3.89 5.35 4.40
Regular wage workers -3.91 3.72 3.33
Casual employee -1.49 4.07 0.03
Total 1.73 4.53 2.89
1993-94 and 2004-05
Self-employed 1.36 3.82 2.16
Regular wage workers -1.40 3.07 2.84
Casual employee -0.19 3.50 0.78
Total 0.76 3.50 1.84
Employment in the Organised & Unorganised Sector, 1999-00 & 2004-05
Unorganised sector
Organised sector Total
Figure (million)
1999-2000 342.64 54.12 396.76
2004-05 394.90 62.57 457.46
Percentage of sector to total
1999-2000 86.36 13.64 100.00
2004-05 86.32 13.68 100.00
Employment Growth Rates by Economic Activity and
Sector
Economic Activity Unorganised Sector
Organised Sector
Total
Industry 6.13 4.79 5.73
Services 4.48 1.70 3.67
Non-agriculture 5.17 3.02 4.53
Total 2.88 2.94 2.89
Source: NSSO 55th & 61st Round Survey
Employment Growth Rate between 2000 and 2005 as per DGET
Major Industry Group Private Public
Organised Private & Public
Argiculture, hunting etc. 1.69 -0.71 0.85
Mining and quarrying -0.50 1.88 1.69
Manufacturing -2.46 -5.89 -3.21
Electricity, gas and water 3.63 -1.89 -1.63
Construction -2.98 -3.54 -3.53
Wholesale and retail trade 2.59 2.45 2.54
Transport, storage & communications 3.96 -2.21 -2.05
Finance, insurance, real estate etc. 7.88 1.67 3.13
Community, social & personal services 1.10 -1.09 -0.75
Total -0.45 -1.39 -1.10
Source: DGET
Employment Growth Rate between 1999-2000 and 2004-05 as per ASI
Manufacturing Total ASI Sector
Total Worker 0.57 0.68
Total Persons Engaged 0.83 0.99
Source: ASI summary results for factory sector 1999-2000 & 2004-05
Employment Elasticity between 1999-2000 and 2004-05 Industry
GroupUnorganised
sectorOrganised
sector Total
Agriculture 1.50 0.19 1.09
Industry 1.07 0.69 0.87
Services 0.72 0.19 0.48
Non-Agr. 0.84 0.37 0.62
Total 0.71 0.36 0.48
Source: Employment data taken from NSSO 55th & 61st Round and GVA estimated by NCEUS using Modified Method of apportioning
Estimated number of workers by sector and type of worker in 1999-2000 and 2004-05 (million)
Informal
workersFormal
workers Total
1999-2000
Unorganised sector 341.28 1.36 342.64
Organised sector 20.46 33.67 54.12
Total 361.74 35.02 396.76
2004-05
Unorganised sector 393.47 1.43 394.90
Organised sector 29.14 33.42 62.57
Total 422.61 34.85 457.46
Estimated number of non-agriculture workers by sector and type of worker in 1999-2000 & 2004-05 (m.)
workerInformal workers
Formal workers Total
1999-2000
Unorganised 109.37 1.06 110.43
Organised 17.58 31.08 48.66
Total 126.95 32.13 159.09
2004-05
Unorganised 140.65 1.42 142.07
Organised 25.89 30.58 56.47
Total 166.54 31.99 198.54
Percentage distribution of non-agriculture workers by sector and type of workers to total non-agriculture workers
workerInformal workers
Formal workers Total
1999-2000
Unorganised 99.04 0.96 100.00
Organised 36.13 63.87 100.00
Total 79.80 20.20 100.00
2004-05
Unorganised 99.00 1.00 100.00
Organised 45.85 54.15 100.00
Total 83.89 16.11 100.00
Comparison of Organised Sector Employment (lakhs)
Manufacturing All
Formal Informal Total Formal Informal Total
ASI 99-00 ---- ---- 81.8 ---- ---- ----
04-05 ---- ---- 83.8 ---- ---- ----
DGET 99-00 ---- ---- 67.4 ---- ---- 280.9
04-05 ---- ---- 57.2 ---- ---- 264.6
NSS 99-00 68.8 62.5 131.6 336.7 204.6 541.2
04-05 60.6 100.6 160.6 334.2 291.4 625.7
Growth rate of workers by sector and type of worker between 1999-2000 and 2004-05 (%)
SectorInformal
workersFormal
workers Total
Unorganised sector 2.89 1.10 2.88
Organised sector 7.33 -0.15 2.94
Total 3.16 -0.10 2.89
Major Industry Group
Organised Sector
Informal worker Formal worker Total
Agriculture 2.46 1.89 2.20
Manufacturing 9.98 -2.68 4.11
Electricity 5.53 2.82 3.16
construction 7.15 2.47 6.58
Trade 1.57 -10.98 -3.68
Hotels 12.96 1.64 8.44
Transport 4.96 -0.22 1.26
Finance 21.75 3.07 5.49
Real estate 17.50 14.97 15.94
Education 16.66 3.22 6.22
Health 15.66 1.69 4.89
Non-agriculture 8.05 -0.32 3.02
Total 7.33 -0.15 2.94
Employment growth rate between 1999-2000 and 2004-05 by major industry group and sector
Source: NSSO 55th & 61st Round Survey
Employment Growth Rate of Informal and Formal Workers by Economic Activity, 1999-00/2004-05
Economic Activity Informal Workers
Formal Workers
Total Workers
Industry 6.66 -0.60 5.73Services 4.71 0.12 3.67
Non-agriculture 5.58 -0.09 4.53
Total 3.16 -0.10 2.89
Source: NSSO 55th & 61st Round Survey
Growth rate of organised sector informal-formal workers by sex and industry group between 1999-2000 & 2004-05
Sex Industry Services Non-agriculture
Male
Informal 13.45 9.92 11.61
Formal -1.80 -0.82 -1.10
Total 3.33 1.15 1.88
Female
Informal 15.41 15.32 15.35
Formal -1.84 1.75 1.19
Total 6.24 5.52 5.67
Persons
Informal 13.74 11.39 12.42
Formal -1.81 -0.36 -0.75
Total 3.65 2.01 2.53
Source: NSSO 55th & 61st Round
Growth rate of organised sector informal-formal workers by area and industry group between 1999-2000 & 2004-05
Area Workers Industry ServicesNon-
agriculture
Rural
Informal 14.22 13.64 13.88
Formal -2.45 -0.72 -1.13
Total 4.20 2.65 3.09
Urban
Informal 13.49 9.96 11.58
Formal -1.57 -0.19 -0.58
Total 3.42 1.69 2.26
Rural + Urban
Informal 13.74 11.39 12.42
Formal -1.81 -0.36 -0.75
Total 3.65 2.01 2.53
Source: NSSO 55th & 61st Round
Incremental employment between 1999-2000 & 2004-05 (lakh)
Major Industry Group
Organised Sector
Informal worker Formal worker Total
Agriculture 3.72 2.55 6.27
Manufacturing 38.09 -8.75 29.33
Electricity 0.39 1.36 1.75
construction 16.54 0.79 17.33
Trade 0.98 -4.97 -3.99
Hotels 2.49 0.21 2.70
Transport 3.04 -0.33 2.71
Finance 2.79 2.61 5.39
Real estate 3.00 4.12 7.12
Administration 1.09 -10.27 -9.18
Education 13.11 8.67 21.78
Health 3.24 1.16 4.40
Non-agriculture 83.14 -4.99 78.15
Total 86.86 -2.44 84.42
Source: NSSO 55th & 61st Round
Percentage distribution of incremental employment between 1999-2000 & 2004-05 (lakh)
Major Industry Group
Organised Sector
Informal workerFormal
worker Total
Agriculture 4.41 3.02 7.43
Manufacturing 45.12 -10.36 34.74
Electricity 0.46 1.61 2.07
construction 19.59 0.94 20.53
Trade 1.16 -5.89 -4.73
Hotels 2.95 0.25 3.20
Transport 3.60 -0.39 3.21
Finance 3.30 3.09 6.38
Real estate 3.55 4.88 8.43
Administration 1.29 -12.17 -10.87
Education 15.53 10.27 25.80
Health 3.84 1.37 5.21
Non-agriculture 98.48 -5.91 92.57
Total 102.89 -2.89 100.00
Increase & growth rate of employment in the OS, by activity type
Activity StatusInformal workers
Formal workers Total
Increase in employment between 1999-2000 & 2004-05 (million)
Self-employed 0.23 0.59 0.82
Regular wage employee 6.01 -1.09 4.92
Casual labour 2.07 0.00 2.07
Total 8.31 -0.50 7.82
Growth Rate between 1999-2000 & 2004-05 (%)
Self-employed 8.95 6.46 7.01
Regular wage employee 12.42 -0.75 2.53
Casual labour 3.99 0.00 3.99
Total 8.05 -0.32 3.02
Growth of Regular Wage Employee by type of work and sector between 1999-2000 & 2004-05
Source: NSSO 55th & 61st Round
SectorIndustry Services
Non-agriculture
Unorganised sector
Informal 5.25 6.19 5.94
Formal 6.55 5.7 5.99
Total 5.34 6.17 5.94
Organised sector
Informal 13.74 11.39 12.42
Formal -1.81 -0.36 -0.75
Total 3.65 2.01 2.53
Total worker
Informal 8.96 7.61 8.06
Formal -1.39 -0.14 -0.48
Total 4.2 3.51 3.72
Average Daily Earning of Workers in the Age Group 15 to 59 Years (1993-94 Prices)
Agriculture Non-Agriculture
Category Status 1999-00 2004-05 1999-00 2004-05
Rural MaleRegular 44.2 41.1 90.8 88.2
Casual 25.5 27.8 37.5 39.5
Rural FemaleRegular 31.0 31.5 91.3 51.6
Casual 18.0 19.3 23.5 25.8
Urban MaleRegular 92.9 52.1 106.5 101.4
Casual 30.0 28.1 39.3 38.2
Urban FemaleRegular 38.9 39.6 97.3 76.5
Casual 19.4 17.2 24.7 23.7
Growth rate of Average Daily Earning of Workers in the Age Group 15 to 59 Years (1993-94 Prices)
Category Status Agriculture Non-Agriculture
Rural Male
Regular Salaried -1.44 -0.58
Casual workers 1.74 1.04
Rural Female
Regular Salaried 0.32 -10.79
Casual workers 1.40 1.89
Urban Male
Regular Salaried -10.92 -0.98
Casual workers -1.30 -0.57
Urban Female
Regular Salaried 0.36 -4.70
Casual workers -2.38 -0.82
Wages of Regular Workers (US. IW/OS, FW/OS), 2004-05
0
50
100
150
200
250
300
350
US
IW/O
S
FW
/OS
US
IW/O
S
FW
/OS
US
IW/O
S
FW
/OS
Rural Urban Combined
Male
Female
Total
Conclusion• Only one time period results available at present from the
NSSO. Issues with the base year (99-00).• Variance with alternative estimates. Both size and growth of
employment in Organised Sector is larger.• While under coverage may be one issue, more significant
issue related to informal workforce.• Growth in informal workforce, including sizeable numbers of
regular workers – low paid & without protection – but a pointer to changing functional and skill requirements.
• Institutional and labour rigidities have not deterred the OS from increasing employment of flexible labour.
• Along with the Unorganised Sector issues, quality of employment and lack of employment and social protection emerging as a significant issue.