Growth of Unorganised Manufacturing in India: Implications for Women Workers

In recent years, there has been a sharp increase in work participation rates among rural women, and while the majority of women workers are engaged in agriculture, the absolute number employed in manufacturing has risen. In this context, we try to understand characteristics of manufacturing employment, drawing on data from different rounds of the Annual Survey of Unorganised Sector Enterprises (ASUSE). Our specific focus is on an important but less studied component of manufacturing, namely manufacturing service providers (or MSPs), that is, units that engage in manufacturing activities with inputs owned by other entities. This could be activities like custom tailoring (where inputs are supplied by customers) or manufacture of textile garments (where inputs are supplied by other businesses). Our main finding is that over 80 per cent of unorganised manufacturing units belonged to five groups: apparel making, tobacco products, textiles, food products, and wood and furniture. We observe a rise in the share of women-owned MSPs; women-owned MSPs have a lower gross value added per worker than other MSP units. In conclusion, outsourcing in the unorganised sector is not characterised by modern manufacturing units. The expansion of employment, especially of women workers, in unorganised manufacturing has occurred in enterprises with limited technological innovation, and activities that can be seen as an extension of traditional household industry.