Nurture Self - employment Sector
A
unique feature of the Indian economy is the self-employment sector. It plays a very
significant role, providing livelihood to larger sections of the society in
different parts of the country. Indians by nature prefer self-employment, as
their traditions encourage it above all other forms.
Self-employment
provides the necessary freedom and opportunities to lead independent lives.
Besides, there are ample scope for people with original ideas to take up new initiatives.
It is an ideal system as both the capitalist and socialist models have serious
limitations.
While
the non-corporate activities occupies the largest space in the Indian economy, the
self–employment sector has a higher share in it. It has very high presence with
shares of about three-fourth or more in the fastest growing service areas such as trade,
transports, construction, hotels and restaurants. Besides many service
providers such as doctors, lawyers and a variety of others belong to this category.
Details
show that the largest number of work force in the country is involved in this
sector. Table 1 presents figures relating to the distribution of workforce by
the categories of employment from 1983 to 1999-2000 based on the different
rounds of data of the National Sample Survey Organisation.
Table 1 Distribution of workforce
by category of employment
Year
|
Self-employment
|
Regular
Salaried Employment
|
Wage
Employment
|
1983
|
57.4
|
13.9
|
28.7
|
1987-88
|
56.0
|
14.4
|
29.6
|
1993-94
|
54.8
|
13.2
|
32.0
|
1999-00
|
52.9
|
13.9
|
33.2
|
The
figures reveal that the self-employment sector has continued to provide
employment for more than half of the work force. At the same time it is relevant
to note that the employment opportunities have been slowly declining.
People
engaged in self-employment activities remain higher in the country. Table 2 presents
the number of persons in self-employment and the labour market (per 1000
distribution of population by household type) in rural areas between 1993-94 and
2009-10.
Table 2
Self-employment and Labour per 1000
distribution of population by household type- Rural
|
1993-94
|
1999-2000
|
2004-05
|
2009-10
|
Self-
employment
|
||||
Agriculture
|
424
|
371
|
398
|
355
|
Non- agriculture
|
131
|
139
|
167
|
164
|
Total
|
554
|
509
|
565
|
519
|
Labour
|
||||
Agricultural
labour
|
275
|
301
|
241
|
238
|
Other
labour
|
75
|
76
|
106
|
148
|
Rural
labour
|
350
|
376
|
346
|
387
|
Source:
National Statistical Organisation, Govt. of India, 2011
The
figures show that self-employment sector was accommodating a very high
proportion of the population (90.4 per cent) in the rural areas during 1993-94.
Out of every 1000 persons, 554 (55.4
percent) were engaged in self-employment activities. Besides, the sector provided
employment to 35 per cent of population as labourers.
Agriculture
accounted for more than three fourth of the self-employed population. Besides,
it provided opportunities for nearly 80 percent of the labour force. As a
result more than 77 percent of the rural population was dependent on agriculture during 1993-94. At
the same time, 13.1 percent of people were engaged in on non-agricultural
self-employment activities. About 21 percent of the rural population was depending
on non-agricultural activities for their livelihood.
It
is important to note that after sixteen years, during 2009-10, the percentage
of self-employed population in rural areas had come down to 51.9 per cent,
showing a decline of 3. 5 percent. It is due to the steep decline in
agriculture, from 42.4 to 35.5 percent. Self-employment in non-agricultural
activities had increased by more than three percent during the same period,
indicating that about half of the people who left agriculture had shifted to
other activities in their own areas.
The
percentage of rural labour was 38.7 per cent of the population during 2009-10,
showing that it had increased by nearly four percent during sixteen years. One
important reason for this is the decline of agriculture leading to huge loss of
employment. Meanwhile, the category of other labour increased almost by hundred
percent during the above period.
Table
3 presents the number of persons (per 1000 distribution of population by
household type) in the self-employed, regular wage/salaried, casual labour and
other categories in urban areas from 1993-94 to 2009-10.
Table 3 Self-employment per 1000
distribution of population by household type- Urban
|
1993-94
|
1999-2000
|
2004-05
|
2009-10
|
Self-employed
|
388
|
393
|
433
|
406
|
Regular Wage/
Salaried
|
428
|
402
|
396
|
385
|
Casual Labour
|
129
|
141
|
118
|
142
|
Others
|
55
|
63
|
52
|
66
|
Source: National
Statistical Organisation, Govt. of India, 2011
The
above figures show that 38.8 percent of the population in urban areas was
engaged in self-employment activities during 1993-94. A higher proportion of
people (42.8 percent) belonged to the regular wage/ salaried classes, while
about 13 per cent was identified as casual
labour.
The
figures for 2009-10 reveal that over a period of sixteen years, the share of
the self-employed population in urban areas had increased by about two percent.
At the same time, the proportion of the regular wage/salaried classes had
declined by more than four percent, while the percentage of causal labour had increased.
Self-employment
remains the major activity of the households in different parts of the
country. Its shares in the rural areas
remained higher with 66 per cent in Assam, 65 per cent
in Rajasthan and 61 per cent in Uttar Pradesh. The percentage of the
self-employed households is higher in the urban areas in some of the major
states of the country. The shares were 50 per cent in Bihar, 44 per cent in
Uttar Pradesh and 41 per cent in Rajasthan. It is important to note that the
self-employment activities remain critical for the major states of the country.
The
figures between 1993-94 and 2009-10 reveal that the proportion of population depending
on self-employment in the country had been coming down. The decline is more in the
rural areas, due to the problems in the agricultural sector. As a result, the
proportion of people belonging to the rural labour and urban casual labour had
increased. At the same time the share in the wage/salaried segment had
decreased leading to loss of secured jobs.
The
above developments reveal that the failure of agriculture in rural areas have
been pushing more people out of it. As a result, the other related self-employment
activities in the rural areas get affected.
It has led to an increasing number of people joining the casual labour
market, both in the rural and urban areas.
The
self-employed sector is a self-made one that does not depend on the
governments. Moreover this sector is the breeding ground for the many of the bigger
enterprises in future. The major business and industrial centres of the country
today were once the initiatives of a few entrepreneurs from this category. This
sector has played a crucial role in laying the foundation for the growth of
Indian economy after independence. Besides, the economic development of
different regions over the years has been largely driven by the self- employed
sections.
In
spite of its enormous significance, this sector has been facing problems over
the years. Their difficulties got aggravated during the recent years. Further
weakening of this sector would affect the sustainability of our economic
system. It is time that we took immediate steps to nurture them, as they remain
the strong foundation of the Indian economy.
Reference:
National Sample Survey
Organization Reports, Govt. of India
National Statistical
Organization, Government of India
( Yuva Bharathi, Vol.42, No.2, Sept.2014)