Call it impact of economic growth or government’s rural employment guarantee programme, home based entrepreneurship in the last decade has declined in India, a new government study has found.
A survey by National Sample Survey Office (NSSO) shows that self-employment declined in non-agriculture sector in 2009-10 as compared to 1999-2000 in both rural and urban areas of India.
The decline was more in rural areas, where the government had introduced employment guarantee programe (NREGA) in 2005, as compared to urban areas, the survey said.
“In rural areas, 49.3 % of the workforce was self-employed in 1999-2000, which decreased to 41.6 % in 2009-10 and in urban areas, the decrease in share of self-employed workforce was from 40.8 % to 39.5 %,” the survey of over one lakh households across all Indian states and union territories said.
A senior government official said that the decline was primarily as more people moved from self-employed to wage earning in both urban and rural areas. “The impact in rural areas was more because of NREGA,” he said.
The NREGA impact can be analysed from NSSO survey on employment, which said that wages for rural workers in real terms have more than doubled for casual workers and was much higher than wages for regular salaried employees.
A worker in rural India was getting Rs. 45.58 per day in 1999-2000, which increased to 55.03 in 2004-05, After NREGA was introduced the average daily wage was Rs. 101.53 in 2009-10. “The decline in self-employed workforce in rural sector is impacted by NREGA programme and other new opportunities in rural sector,” said the 12th plan document recently approved in the National Development Council meeting.
The decline in self employment in urban areas could be attributed to creation of new job opportunities, when employment in manufacturing sector increased by about 20 % in first half of the last decade and the declined by five percent in the second half.
The NSSO findings pose a new challenge for the government as more people are likely to seek wage employment in the coming years with job creation in many non-agriculture sectors such as manufacturing, mining and trade falling.
“The second half of the last decade witnessed a decline of about five million jobs in most of labour intensive industries,” the 12th plan document said and set a target of creation of 100 million new jobs by 2022 in manufacturing and emerging sectors such as information technology.
The NSSO survey also found that the decline in self-employment was more among women, then men in both rural and urban areas. “In both rural and urban areas girls over 14 years of age are either attending educational institutions or have withdrawn from workforce due to improvement in the family income,” the plan document said.