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Dynamics of Non-Farm Informal Enterprises in Rural Uttar Pradesh: A Disaggregated Analysis

Author

Listed:
  • Singh, Udai Bhan

    (Amity University Jaipur)

  • Mishra, Nripendra KIshore

    (Department of Economics, Banaras Hindu University)

Abstract

There are two quite opposite view about Non-Farm Informal Enterprises (NFIE). First, it is low productive sector producing low quality goods and the other one recognizes it as dynamic, flexible, innovative and contributing significantly in economic development. Based on National Sample Survey unit level data (1999-2000 and 201011) and village level household enterprise data, this study tries to understand the dynamics of NFIE at disaggregate level in rural Uttar Pradesh. NFIE are mainly Own Account Enterprises (OAEs) in all four regions of state. During 1999-2000 to 2010-11, the share of manufacturing enterprises has declined and trade has gained significantly. Though there has been phenomenal growth in enterprises reporting to be expanding, still more than half of the enterprises are stagnant. The intensity of sub-contracting is increasing in all regions. Employment growth has been mostly sluggish in OAEs and is less than 5 per cent per annum in establishments. Results of primary data reveal that the main reason for start-up of NFIE was lack of other productive employment. Remittances, surplus from non-farm, relative/friends support and surplus from agriculture are the main sources of initial capital for start-up. This study also confirms that enterprise profit contributes significantly in household income and in absence of this household takes recourse to wage income. It seems that growth of informal enterprises has replaced casual work in rural Uttar Pradesh.

Suggested Citation

  • Singh, Udai Bhan & Mishra, Nripendra KIshore, 2016. "Dynamics of Non-Farm Informal Enterprises in Rural Uttar Pradesh: A Disaggregated Analysis," Journal of Regional Development and Planning, Rajarshi Majumder, vol. 5(1), pages 35-54.
    • Handle: RePEc:ris:jrdpin:0038
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    References listed on IDEAS

    as
    1. Mitra, Arup,, 2013. "Can industry be the key to pro-poor growth? : An exploratory analysis for India," ILO Working Papers 994843463402676, International Labour Organization.
    2. Deininger, Klaus & Jin, Songqing & Sur, Mona, 2007. "Sri Lanka's Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth," World Development, Elsevier, vol. 35(12), pages 2056-2078, December.
    3. repec:ilo:ilowps:484346 is not listed on IDEAS
    4. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Informal Enterprises; Self-employed; Sub-contracting; Labour productivity;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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