widening exclusion: informalisation in the indian economy ravi srivastava

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Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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Page 1: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

Widening Exclusion: Informalisation in the Indian

Economy

Ravi Srivastava

Page 2: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

Emp. In Organised Manufacturing (ASI)

0

4

8

12

Millio

ns

Total Employment Total Workers

Page 3: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 4: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

% 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

Page 5: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 6: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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”

Page 7: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 8: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 9: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 10: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 11: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 12: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 13: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 14: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 15: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 16: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 17: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 18: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 19: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 20: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 21: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 22: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 23: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 24: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 25: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 26: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 27: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 28: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 29: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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

Page 30: Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

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.