100

Chapter - 3

GROWTH AND DETERMINANTS OF PRODUCTIVITY IN

UNORGANISED MANUFACTURING SECTOR IN INDIA

In most of the developing countries, the informal sector is generally relied

upon for creation of employment opportunities for its teeming unemployed workers

who are not found fit to be employed in the organised sector which is largely known

for the specialised skills. The developing countries in their initial stages of

development or before they can „take off‟ the plane of development, are largely

characterised by the problems of over-population (indicating higher rate of

unemployment due to higher growth rate of labour force than the growth of

employment creation in the economy), poverty, illiteracy among working masses and

so a plethora of unskilled labour force apart from lack of capital and required

infrastructure. The informal sector in these countries emerges to be a panacea for

these ills. But these problems are also associated with the problem of low productivity

and any sector absorbing this type of labour force and suffering from the problem of

lack of capital and infrastructure is less likely to perform well (Oberai and Chadha,

2001; Unni et. al., 2001; Shah, 2002). But given their role in employment generation

and reduction of poverty, the importance of this particular sector does not diminish.

As per latest estimates, during the period 2000-01 to 2004-05, the workforce

in India has grown by 2.74 per cent per annum; while this rate in the unorganised

sector is 3.01 per cent per annum (the growth rate of the workforce in the organised

sector is negative to the extent of 1.1 per cent per annum). But if we decompose the

5.91 per cent per annum growth of gross domestic product of the country during this

period, the unorganised sector experienced a growth rate of 5.68 per cent per annum

101

as compared to 6.21 per cent per annum in the organised sector (Economic Survey,

2007-08 and NAS, 2007). However, in case of manufacturing sector, this gap is more

striking as the output in organised manufacturing grew at 8.04 per cent per annum as

compared to only 3.6 per cent per annum in the unorganised manufacturing sector

while on the other hand the respective growth rates of employment are -3.21 per cent

for the organised manufacturing and 6.08 per cent per annum for the unorganised

manufacturing sector (ibid). This points towards low level of productivity in the

unorganised sector in general and the unorganised manufacturing sector in particular.

The issue of productivity assumes even more importance due to the fact that a big

chunk of work force is employed in this particular sector and the conditions of

workers can only be improved via improved productivity of the units in which they

are employed (NCEUS, 2007). So, many researchers have analysed the performance

of the manufacturing sector, particularly the productivity trends. Productivity growth

has long been recognised as an important driver of economic growth and a

determinant of international competitiveness of a country relative to others. There is a

large body of literature on productivity growth, its components and determinants of

the organised manufacturing sector in India (see for instance Brahmananda 1982;

Balakrishnan and Pushpangadhan 1994; Dholakia and Dholakia 1994; Goldar and

Kumari 2003; Goldar and Aggarwal 2004). However, only a small number of studies

have examined productivity trends in unorganised manufacturing sector (Unni et. al.

2001; Mukherjee 2004; Rani and Unni 2004). Ahluwalia (1991) analysed the long

term trends of partial productivity in the manufacturing sector. Balkrishanan and

Pushpagandan (1994) have discussed about the total factor productivity growth rates.

102

A significant development in the Indian economy in the post 1990 period is

the acceleration of the reform process that was initiated in the 1980s. The reforms

were intended to improve the efficiency, productivity and international

competitiveness of Indian industry. Thus the impact of economic reforms on

manufacturing productivity has been a subject of research inquiry but the findings are

controversial and inconclusive. Krishna and Mitra (1998), Pattnayak and Thangavelu

(2003), Unel (2003) and others argued that total factor productivity (TFP) growth was

positive in the post-reforms period while others showed that economic reforms have

adversely affected productivity (Goldar and Kumari 2003; Balakrishnan et al. 2000).

The substantial variation in the impact of reforms across Indian states has been yet

another subject of research interest. Ray (1997, 2002), Aghion et. al. (2008) and

Kumar (2004) found evidence of tendency towards convergence in total factor

productivity (TFP) growth rate among Indian states in the reform years in respect of

organised manufacturing. Unni et. al. (2001) found that TFP growth in the

unorganised manufacturing sector declined in the post-reform period. A study on

productivity trends in Indian manufacturing undertaken by Unel (2003) has concluded

that total factor productivity (TFP) growth in the manufacturing and many of its sub-

sectors accelerated after the 1991 reforms. Unel‟s estimate of average annual growth

rate in TFP in aggregate manufacturing is 1.8 per cent per annum for the period 1979-

80 to 1990-91. The estimate is based on the value added function framework, taking

value added as output, and labour and capitals as inputs. The magnitude and direction

of trend have, however, varied depending on the source of data used and the segment

to which their results are related (i.e. organised or unorganised part of manufacturing

103

or total manufacturing). This has contributed to leaving the much contested

hypothesis of acceleration or deceleration in the productivity performance of the

sector during 1990s and 2000s. Besides these a few studies that need to be mentioned

here are that of Chadha (1999), which examined the growth dynamics of different

segments of unorganised manufacturing sector in India between 1984-85 and 1994-95

separately for rural and urban areas and observed that labour productivity is higher in

the urban manufacturing sector than that of its rural counterpart; Goldar and Mitra

(1999) who tried to measure the total factor productivity growth (TFPG) in

unorganised manufacturing sector in India and Bhalla (2001) computed TFP growth

for two periods, 1984-85 to 1989-90 and 1989-90 to 1994-95 in unorganised

manufacturing sector and observed a high positive growth in NDMEs in rural areas

and a high negative growth in DMEs in urban areas. TFP growth in second period is

negative in both types of enterprises in urban and rural areas. Thus, we have seen that

the issue of measurement of productivity in the unorganised sector has recently been

receiving considerable attention among a section of researchers in India. So, here too,

an attempt has been made to see the latest trends in productivity growth in the

unorganised manufacturing vis-à-vis the previous time periods. Though, productivity

is generally defined as a simple relationship between the outputs and individual

inputs, a distinction can be made between total productivity and total factor

productivity (TFP) as they respectively, are derived from gross output and gross value

added (Krishna, 1970 and Rao, 1996). Using the latter concept, here productivity is

being measured as the value added in any enterprise. Total factor productivity growth

reflects the residual growth in value added after accounting for the combined

104

contribution of labour and capital. Similarly, for calculating the partial productivities,

the capital productivity is being defined as value added per unit of capital (fixed

capital employed) and labour productivity as value added per unit of labour. Before

analysing the growth trends of productivity in the unorganised manufacturing sector,

we will have a quick look at the share of various enterprises, sectors and regions in

the gross value added, capital (market value of fixed assets) and workers employed in

this particular sector.

Table 3.1 shows the consecutive share of various types of enterprises in the

gross value added, fixed assets as well as employment in the unorganised

manufacturing sector of India. The table shows that the OAMEs always have largest

share in total employment generation in the unorganised manufacturing sector of

India. But their share in gross value added and fixed assets slipped to second rank in

2005-06 as the share of DMEs increased from 33.42 per cent per annum in 1994-95 to

43.91 per cent per annum in 2005-06 in case of GVA and from 34.87 per cent per

annum in 1994-95 to 36.62 per cent per annum in 2005-06 in case of fixed assets,

whereas the share of NDMEs had remained almost stagnant during this time period.

Another interesting feature of the table is that, the OAMEs had not only witnessed a

decline in their share in total employment, fixed assets and productivity, the extent of

decline in case of GVA (by 11.11 percentage points) is much greater than that of the

employment (3.26 percentage points) and fixed assets (1.39 percentage points). Still,

the OAMEs contribute about 32.01 per cent of total productivity (GVA) by

employing 64.99 per cent of total workers and 36.24 per cent of total fixed assets in

the unorganised manufacturing sector of India while the respective shares of NDMEs

105

are 24.08, 15.86 and 27.14 and that of the DMEs are 43.91, 19.15 and 36.62 per cent.

Further, in every case the share of rural OAMEs is far greater than their urban

counterparts and the situation is reverse in case of NDMEs and DMEs where the

urban enterprises have greater share as compared to the rural ones. For a deeper

insight regarding the share in GVA, fixed assets and employment we can analyse the

data across sectors and regions. Table 3.2 shows the sector-wise share and Table 3.3

shows the state-wise share in GVA, fixed assets and total employment. A cursory

look at the tables show that during all the years under study, the sectors of

manufacturing of agro foods and textiles had the largest share in GVA, fixed assets

and total employment in the unorganised manufacturing sector of India. However, the

regional shares show that though, Uttar Pradesh and West Bengal had the largest

share in total employment, the state of Maharashtra, had the largest share in GVA and

fixed assets, followed by Uttar Pradesh, West Bengal and Tamil Nadu in that order by

the year 2005-06. In this respect, the rank of Uttar Pradesh and West Bengal had been

interchanging with that of Tamil Nadu and Maharashtra during 1994-95 and 2000-01

due to variations in growth of productivity, employment and fixed assets across the

regions. So, to know about the extent of these growth rates, we would analyse the

growth of productivity (both at current and constant prices) across sectors, states as

well as by type of enterprises.

Table 3.4 exhibits the growth rate of GVA for the different types of

enterprises at the current prices. The table shows that the GVA in unorganised

manufacturing sector of India has grown by 7.91 per cent per annum in 1994-95 to

2000-01 and by 7.59 per cent per annum during 2000-01 to 2005-06. However, the

106

growth rate of GVA in the rural areas has declined from 9.44 per cent per annum to

6.77 per cent per annum while in urban areas, it has increased from 5.78 per cent per

annum to 8.71 per cent per annum during this period. The enterprise level figures

show that in OAMEs the growth rate of GVA at current prices has decreased sharply

from 7.20 per cent per annum in 1994-95 to 2000-01 to 1.85 per cent per annum in

2000-01 to 2005-06. This decrease is sharper in the rural areas in comparison to urban

areas. The growth of GVA has also decreased for the NDMEs from 10.76 per cent per

annum in 1994-95 to 2000-01 to 6.22 per cent per annum in 2000-01 to 2005-06. This

decreasing trend is noticed both in rural and urban areas. The DMEs have registered

an increase in GVA from 10.65 per cent per annum in 1994-95 to 2000-01 to 12.94

per cent per annum in 2000-01 to 2005-06. This growth in GVA is there only for the

urban areas as it has decreased in the rural areas. Thus, at current prices, the GVA in

unorganised manufacturing sector of India has grown positively and the DMEs are the

largest contributors of the total growth in GVA of the unorganised manufacturing

sector. The picture becomes clearer if we analyse this growth at constant prices (at

1993-94 prices).

Table 3.5 shows that GVA at constant prices in the unorganised

manufacturing sector of India has grown by 3.73 per cent per annum in 1994-95 to

2000-01 and by 3.67 per cent per annum in 2000-01 to 2005-06. The productivity in

urban units seems to be growing at a faster rate as compared to their rural

counterparts. The table shows that the growth of GVA in rural areas declined from

5.19 per cent per annum in 1994-95 to 2000-01 to 2.88 per cent per annum in 2000-01

to 2005-06 while in urban areas it increased from 1.68 per cent per annum in 1994-95

107

to 2000-01 to 4.75 per cent per annum in 2000-01 to 2005-06. It is also evident from

the table that GVA in OAMEs increased at a rate of 3.4 per cent per annum in 1994-

95 to 2000-01 but declined by 1.89 per cent per annum in 2000-01 to 2005-06, when

the urban units have shown a sharper decline (at a rate of 2.04 per cent per annum) as

compared to the rural units (at rate of 1.46 per cent per annum). The GVA in NDMEs,

though had grown at a positive rate in both the time periods, yet the pace of growth

has lowered from 6.47 per cent per annum in 1994-95 to 2000-01 to 2.35 per cent per

annum in 2000-01 to 2005-06. On the other hand, the DMEs have shown an

astounding performance in this case as their growth rate increased from 6.35 per cent

per annum in 1994-95 to 2000-01 to 8.82 per cent per annum in 2000-01 to 2005-06.

This is the aggregate picture. To have a deeper insight into the productivity growth we

can analyse the contribution of various sectors in productivity growth in the

unorganised manufacturing sector. Table 3.6 and 3.7 shows the growth rate of GVA

at current and contrast prices for different industry groups. Table 3.6 shows that all

the sub-sectors in unorganised manufacturing sector of India had grown at a positive

rate during 1994-95 to 2000-01 and the sectors of manufacturing of non-metallic

mineral products and manufacturing of transport equipments emerged as the fore-

runners as far as the growth of productivity is concerned. But during 2000-01 to 2005-

06, a different set of industries took their place e.g. manufacturing of metal products

(19.51 per cent per annum), basic metals (16.23 per cent per annum), leather & leather

products (11.84 per cent per annum). On the other hand the sector of manufacturing of

chemicals & chemical products has shown negative growth rate. The productivity in

this particular sector has actually declined due to decline in productivity in rural areas

108

as the productivity in urban areas has grown at a rate of 7.29 per cent per annum

during 2000-01 to 2005-06.

Further, this growth of productivity at constant prices can be observed from

Table 3.7. The table shows that during 1994-95 to 2000-01, all the industries have

registered a positive growth in GVA except the manufacturing of metal products

which declined at a rate of 0.18 per cent per annum and this decline is due to the

decline in productivity in the urban units where it declined by 0.54 per cent per

annum. During 1994-95 to 2000-01 the sector of manufacturing of non-metallic

mineral products registered the highest growth of productivity which stood at 13.85

per cent per annum. Apart from this, five more industry groups have registered a

higher growth in the GVA than the average growth during 1994-95 to 2000-01. These

are manufacturing of transport equipments (5.92 per cent per annum), manufacturing

of paper & paper products (5.73 per cent per annum), manufacturing of basic metals

(4.97 per cent per annum), manufacturing of leather & leather products (4.91 per cent

per annum) and manufacturing of textiles (3.76 per cent per annum). On the other

hand, the sectors of manufacturing of wood & wood products (1.77 per cent annum),

manufacturing of chemicals & chemical products (1.79 per cent per annum), rubber &

plastic products (1.91 per cent per annum) etc. registered a low growth of productivity

during this period. For the period 2000-01 to 2005-06, again six industry groups have

registered higher growth in the GVA than the average growth of 3.67 per cent per

annum. These industries are manufacturing of metal products (9.38 per cent per

annum), manufacturing of leather & leather products (7.75 per cent per annum),

manufacturing of non-metallic mineral products (7.43 per cent per annum),

109

manufacturing of basic metals (6.38 per cent per annum), manufacturing of

machineries (4.78 per cent per annum) and manufacturing of rubber & plastic

products (3.71 per cent per annum). Of these industries manufacturing of non metallic

mineral products, basic metals and leather & leather products had performed equally

well during the preceding period 1994-95 to 2000-01. There is negative growth during

this period for the manufacturing of chemicals & chemical products (-4.15 per cent

per annum) and manufacturing of paper & paper products (-2.80 per cent per annum).

On the other hand, significant increase in the growth rate of total productivity has

been observed for the manufacturing of metal products as it has turned around from

the negative growth rate of 0.18 per cent per annum during 1994-95 to 2000-01 to a

very high growth rate of 9.38 per cent per annum during 2000-01 to 2005-06, while a

significant decline in the growth of manufacturing of paper & paper products can

be observed as it has declined from the positive rate of 5.73 per cent per annum in

1994-95 to 2000-01 to negative growth of 2.80 per cent per annum in 2000-01 to

2005-06.

The analysis of GVA by rural-urban classification shows that in rural areas

during 1994-95 to 2000-01, the growth of GVA is significantly high in the sectors of

manufacturing of transport equipments (14.99 per cent per annum), manufacturing of

non-metallic mineral products (14.18 per cent per annum), manufacturing of basic

metals (13.81 per cent per annum), manufacturing of paper & paper products (10.69

per cent per annum), manufacturing of rubber & plastic products (8.31 per cent per

annum) and manufacturing of machineries (6.57 per cent per annum) while the sectors

of manufacturing of metal products, manufacturing of agro foods, manufacturing of

110

textiles etc. remained the laggards. However, the picture changed by the period 2000-

01 to 2005-06, as the high growth sector of manufacturing of paper & paper products

experienced a decline in its productivity (at rate of -8.8 per cent per annum) along

with the sector of manufacturing of chemicals & chemical products (-7.38 per cent per

annum). In contrast the manufacturing of leather & leather products (10.09 per cent

per annum), manufacturing of rubber & plastic products (9.66 per cent per annum)

and manufacturing of machineries (7.34 per cent per annum) have shown an

increasing trend in GVA during this period. In urban areas during 1994-95 to 2000-

01, the growth of GVA was very high for the sectors of manufacturing of non metallic

mineral products (10.96 per cent per annum), manufacturing of transport equipments

(4.11 per cent per annum), manufacturing of paper & paper products (3.84 per cent

per annum) and manufacturing of leather & leather products (3.10 per cent per

annum). On the other hand, the sectors of manufacturing of textiles, manufacturing of

wood & wood products and manufacturing of metal products observed a decline in

their productivity. However, by the period 2000-01 to 2005-06, all these sectors

turned to a positive growth rate and the shift was spectacular in case of manufacturing

of metal products which turned from a negative growth rate of 0.54 per cent per

annum during 1994-95 to 2000-01 to a positive of 12.87 per cent per annum. This

sector has shown the highest rate of growth of productivity during this period. Apart

from this the manufacturing of basic metals also registered an impressive growth rate

(9.34 per cent per annum) of productivity in urban areas. Actually, the upward shift in

average growth rate of productivity in urban unorganised manufacturing units became

possible only due to these two sectors.

111

After analysing the sector-wise performance of the productivity growth in the

unorganised manufacturing sector of India, we would now analyse the state-wise

growth of productivity to observe the extent to which a particular state has contributed

to overall productivity growth in this particular sector. The state-wise growth of

productivity has been given at current prices in Table 3.8 and at constant prices in

Table 3.9. It can be observed from these tables that during the period 1994-95 to

2000-01 at the current prices all the states except Madhya Pradesh have shown

positive growth of productivity but at the constant prices Haryana and Maharashtra

also joined Madhya Pradesh having negative growth of gross value added. Similarly,

for the period 2000-01 to 2005-06, all the states have shown positive productivity at

current prices but at constant prices, the states of Bihar, West Bengal and Punjab had

experienced decline in their productivity. The states of Jammu and Kashmir,

Himachal Pradesh and Orissa have shown a very high growth rate of productivity

during 1994-95 to 2000-01. By the period 2000-01 to 2005-06, many states with

negative growth of productivity registered a remarkable improvement e.g. the growth

rate of productivity increased tremendously for the states of Haryana (from -2.42 per

cent per annum to 11.24 per cent per annum) and Maharashtra (from -0.97 per cent

per annum to 10.68 per cent per annum). Similarly, the states of Karnataka (11.46 per

cent per annum), Uttar Pradesh (7.55 per cent per annum), Orissa (6.72 per cent per

annum) and Rajasthan (6.13 per cent per annum) also performed quite well on front of

productivity during this period. On the other hand, states like Bihar, Punjab and West

Bengal have shifted from positive growth to the negative growth over the period.

112

The rural-urban break-up of these states shows that in the rural areas the

growth in the GVA is high in the states of Jammu and Kashmir (25.61 per cent per

annum), Himachal Pradesh (14.29 per cent per annum), Bihar (9.86 per cent per

annum) and Orissa (8.77 per cent per annum) for the period 1994-95 to 2000-01

whereas the states of Haryana and Tamil Nadu have registered a negative growth. For

the period 2000-01 to 2005-06 it can be seen that Karnataka (14.49 per cent per

annum), Haryana (12.62 per cent per annum), Madhya Pradesh (9.04 per cent per

annum) and Tamil Nadu (8.77 per cent per annum) are the top four states in terms of

GVA in the rural areas. Further, the states of Himachal Pradesh (-6.57 per cent per

annum), Bihar (-4.54 per cent per annum), Punjab (-4.00 per cent per annum) and

West Bengal (-3.65 per cent per annum) show the negative growth rates of GVA. All

these four states have shifted from a high positive growth rate during 1994-95 to

2000-01 to negative growth rate during 2000-01 to 2005-06. While the rural

manufacturing units in most of the states showed a decline in the growth rate of

productivity over the period, the states of Haryana, Karnataka, Madhya Pradesh,

Rajasthan and Tamil Nadu experienced an increase in productivity in their rural units.

In the urban areas, during the period 1994-95 to 2000-01 it can be observed that the

GVA in different states is less as compared to rural areas except in Gujarat, Kerala,

Punjab and Tamil Nadu. For this period the states of Himachal Pradesh (13.33 per

cent per annum), Gujarat (5.44 per cent per annum), Punjab (4.96 per cent per annum)

and Andhra Pradesh (4.12 per cent per annum) have registered a significant higher

growth rates in GVA. On the other hand, this growth is negative for the states of

Madhya Pradesh., Haryana and Maharashtra. On the other hand, during the period

113

2000-01 to 2005-06, it can be observed that in majority of the states, the urban units

performed much better than their rural counterparts. In urban areas, the states of

Himachal Pradesh (30.35 per cent per annum), Uttar Pradesh (13.67 per cent per

annum), Maharashtra (10.68 per cent per annum), Haryana (10.55 per cent per

annum) and Karnataka (9.45 per cent per annum) and Jammu and Kashmir (8.33 per

cent per annum) are the top six states in terms of growth of GVA. All these states

have registered a significant increase in the growth of GVA in urban areas as

compared to the previous period. During the same period the states of Kerala, Madhya

Pradesh, Punjab and Tamil Nadu have registered a negative growth rate. Further it is

observed that the states of Haryana, Maharashtra had turned themselves from negative

growth during 1994-95 to 2000-01 to a very high positive growth in 2000-01 to 2005-

06 whereas the states of Andhra Pradesh, Kerala have shifted themselves from high

growth rate during 1994-95 to 2000-01 to the negative growth rate trajectory during

2000-01 to 2005-06. In the urban areas, the state of Himachal Pradesh has retained its

first position in terms of GVA over the period whereas its growth rate was negative

and the lowest for the period 2000-01 to 2005-06 in the rural areas. Thus, the period

from 1994-95 to 2005-06, which is known for the rapid liberalisation of the economy

has differently affected various sectors and regions.

The Partial Productivities

Most of the studies on Indian manufacturing have relied upon total factor

productivity (TFP) (Bhalotra, 1998; Goldar, 2000). But the TFP method, too, has its

limitations. An increase in TFP does not ensure same trends for labour productivity

and capital productivity (Pulapre, 2004). A rising TFP may mean a declining labour

114

productivity or it may have different rate of change as the growth of labour

productivity and so can be stated for capital productivity as well. The labour

productivity in manufacturing has shown increasing trends during the nineties, even

when TFP as well as capital productivity has been found declining (Goldar, 2000).

Thus, the analysis of TFP alone will not be sufficient in this regard.

a. Labour productivity

Labour productivity is generally defined in terms of turnover per worker.

Calculation of labour productivity is important from the view point of measuring the

contribution of the workers in total output. It can also serve as an indicator of wages,

which theoretically, move in the direction of productivity changes. So, an attempt has

been made to observe the trends in productivity growth in various enterprises and sub-

sectors of unorganised manufacturing sector of India. Table 3.10 depicts the growth

of labour productivity for different types of enterprises at the current prices. We can

see a slight decline in the growth of labour productivity in Indian unorganised

manufacturing units from 8.81 per cent per annum during 1994-95 to 2000-01 to 8.02

per cent per annum during 2000-01 to 2005-06. Another point to note is that the rural

units have registered a decline in labour productivity whereas the same has increased

for the urban units. So the rural units are responsible for the decline in the growth of

labour productivity in the unorganised manufacturing sector of India. Both the

OAMEs and NDMEs have experienced a decline in labour productivity in the rural as

well as urban areas. In case of OAMEs this declined from 8.62 per cent per annum in

1994-95 to 2000-01 to 3.08 per cent per annum in 2000-01 to 2005-06 and in NDMEs

it declined from 9.63 per cent per annum in 1994-95 to 2000-01 to 6.13 per cent per

115

annum in 2000-01 to 2005-06. On the other hand, the DMEs have registered a

significant growth in labour productivity both in the rural and urban areas.

Table 3.11 shows the growth rate of labour productivity at constant prices.

The table shows that the growth of labour productivity has declined from 4.59 per

cent per annum during 1994-95 to 2000-01 to 4.08 per cent per annum during 2000-

01 to 2005-06 and the rural units have registered a decline and the urban ones an

upward trend in the growth rate of labour productivity during this period. The

OAMEs have registered a decline in the growth of labour productivity from 4.41 per

cent per annum in 1994-95 to 2000-01 to negative growth of 0.68 per cent per annum

during 2005-06. This shift from high positive growth rate to the negative growth rate

for OAMEs can be observed both for the rural and urban areas. The rural OAMEs

have registered a sharper decline in the growth of labour productivity as compared to

urban units. In NDMEs it has decreased from 5.38 per cent per annum in 1994-95 to

2000-01 to 2.25 per cent per annum in 2000-01 to 2005-06. However, the DMEs have

observed a significant growth in the labour productivity from 3.83 per cent per annum

in 1994-95 to 2000-01 to 8.45 per cent per annum in 2000-01 to 2005-06. This

increase in the growth of labour productivity over the period can be noticed both in

rural and urban DMEs. So, there is decline in the growth of labour productivity for the

OAMEs and NDMEs whereas the same has increased tremendously in the case of

DMEs.

Further, the sector-wise analysis shows that at current prices (Table 3.12), the

labour productivity has recorded the highest rate in the sector of manufacturing of

non-metallic mineral products (14.54 per cent per annum) during 1994-95 to 2000-01

116

and this place was taken over by the sector of manufacturing of metal products (17.68

per cent per annum) during 2000-01 to 2005-06. During the period 1994-95 to 2000-

01 many sectors have registered a very high growth rate of labour productivity. They

range from traditional units of manufacturing of agro foods, paper & paper products,

leather & leather products, textiles etc. to modern ones of manufacturing of transport

equipments, basic metals and non-metallic mineral products. But by the period 2000-

01 to 2005-06, higher growth rate of labour productivity seems to be a feature of the

modern sectors of metal products, basic metals, non-metallic mineral products and

machineries only and the growth of labour productivity declined in all other

traditional and non-traditional industries. The rural-urban break-up shows that only

the sector of manufacturing of machineries in rural areas and the sectors of

manufacturing of metal products, basic metals, chemicals & chemical products and

machineries in urban areas have registered an increase in growth rate of labour

productivity during these two time periods and the rest of the industries showed

decline in the growth rate in both the rural and urban areas.

Table 3.13 exhibits the sector-wise growth of labour productivity at the

constant prices. The table shows that all industries have registered a positive growth

in labour productivity during 1994-95 to 2000-01. The sectors of manufacturing of

non metallic mineral products (10.09 per cent per annum), manufacturing of textiles

(9.55 per cent per annum), manufacturing of transport equipments (6.06 per cent per

annum), manufacturing of basic metals (6.05 per cent per annum) manufacturing of

paper & paper products (5.96 per cent per annum), and manufacturing of leather &

leather products (5.81 per cent per annum) were among the forerunners as far as the

117

growth of labour productivity is concerned. During the succeeding period 2000-01 to

2005-06, all industries except the manufacturing of transport equipments, registered a

positive growth. During this period, the industries which show the higher growth of

labour productivity are manufacturing of non metallic mineral products (7.89 per cent

per annum), manufacturing of metal products (7.71 per cent per annum),

manufacturing of basic metals (7.55 per cent per annum) and manufacturing of

machineries (6.60 per cent per annum). During this period a steep decline in the

growth of labour productivity can be observed for manufacturing of textiles,

manufacturing of paper & paper products, manufacturing of transport equipments

over the period. Actually, the growth rate of labour productivity has gathered

momentum only in the sectors of manufacturing of basic metals, metal products and

machineries that too on basis of their urban units (with the exception of

manufacturing of machineries where the rural units also have registered an increase in

growth of labour productivity like their urban counterparts). It can also be observed

that both in the rural and urban areas, the growth rate of labour productivity is positive

in all industries during 1994-95 to 2000-01. However, by the period 2000-01 to 2005-

06, it turned negative for the manufacturing of paper & paper products, leather &

leather products, chemicals & chemical products, metal products and transport

equipments in rural areas and for manufacturing of leather & leather products in urban

areas. In rural areas, the industries of manufacturing of machineries, non metallic

mineral products , textiles, rubber & plastic products etc. are among the highest

growth sectors as far as growth of labour productivity is concerned while in urban

areas this group includes the manufacturing of metal products, basic metals,

118

machineries etc. On the other hand, growth of labour productivity was the lowest in

the sector of manufacturing of chemicals & chemical products among the industries

with positive growth rate of labour productivity. Apart from this, the traditional

industries like that of manufacturing of paper & paper products, leather & leather

products, wood & wood products etc. were the laggards during 2000-01 to 2005-06.

Finally, the state-wise analysis of growth of labour productivity at current and

constant prices, respectively, is given in Table 3.14 and 3.15. The Table 3.14 shows

that the growth of labour productivity is very high for the states of Himachal Pradesh

(16.56 per cent per annum), Jammu and Kashmir (15.87 per cent per annum), Orissa

(12.30 per cent per annum), Kerala (12.25 per cent per annum), and Bihar (11.40 per

cent per annum) during the period 1994-95 to 2000-01. The negative growth is

noticed for the state of Madhya Pradesh. Haryana, Tamil Nadu, and Maharashtra have

recorded comparatively slower growth in the labour productivity. During the period

2000-01 to 2005-06 Karnataka, Haryana, Jammu and Kashmir, Maharashtra, Uttar

Pradesh and Orissa have registered a higher growth whereas it is less in states of

Bihar, Gujarat, West Bengal and Punjab. However, the states of Maharashtra,

Haryana, Karnataka and Uttar Pradesh can be enlisted among the states which have

registered the highest shifts in the growth of their labour productivity. At the constant

prices, it can be seen that during 1994-95 to 2000-01 all the states except Haryana and

Madhya Pradesh have registered a positive growth in labour productivity. The states

like Himachal Pradesh (12.04 per cent per annum), Jammu and Kashmir (11.37 per

cent per annum), and Orissa (7.94 per cent per annum) have registered a high growth

in labour productivity. The states of Madhya Pradesh, Haryana, Maharashtra and

119

Tamil Nadu have shown negative or very low growth rate for the period. During

succeeding period 2000-01 to 2005-06, all the states except Bihar have shown

positive growth in the labour productivity. Moreover, the states which have shown

higher growth in the preceding period were replaced by the new ones. These new

turn-around states are Karnataka (10.30 per cent per annum), Haryana (9.35 per cent

per annum), Maharashtra (9.01 per cent per annum), Jammu and Kashmir (8.91 per

cent per annum) and Uttar Pradesh (8.38 per cent per annum). The states of Haryana

and Madhya Pradesh which have negative growth during 1994-95 to 2000-01

achieved a very high positive growth during the period. On the other hand, the state of

Bihar which has high positive growth during 1994-95 to 2000-01 has turned itself into

negative one, The other states which have shown a steep decline in the growth of

labour productivity are Andhra Pradesh, Gujarat, Himachal, Kerala, Punjab and West

Bengal. The study of states on the rural-urban basis depicts that in the rural areas

during the period 1994-95 to 2000-01 all states except Haryana (- 0.31 per cent per

annum) have registered a positive growth in the labour productivity. It can be noticed

that during this period the smaller states show the higher growth in labour

productivity in rural areas than the bigger ones. During the period 2000-01 to 2005-06

four states have shown a negative growth of labour productivity in comparison to only

one in the preceding period .The states of Bihar, Himachal, Punjab and West Bengal

have turned themselves from high growth to the negative growth over the period.

In the urban areas it can be seen that the growth of labour productivity in most

of the states is lesser than that in rural areas during the period 1994-95 to 2000-01.

During the period 2000-01 to 2005-06 five states in urban areas have registered a

120

negative growth in comparison to just two in earlier time period. The states of

Himachal Pradesh (26.43 per cent per annum), Uttar Pradesh (13.27 per cent per

annum), Jammu and Kashmir (12.27 per cent per annum), Maharashtra (8.62 per cent

per annum), Karnataka (8.52 per cent per annum) and Haryana (8.41 per cent per

annum) have registered a very high growth in labour productivity during this period.

Of these high growth states Haryana, Jammu and Kashmir, Maharashtra and Uttar

Pradesh have netted a negative or lesser growth during the preceding period. On the

other hand, Andhra Pradesh, Gujarat, Kerala and Madhya Pradesh registered a

negative growth during 2000-01 to 2005-06. Among these, the state of Madhya

Pradesh has registered a negative growth over the entire period in urban areas.

b. Capital productivity

Capital productivity can be defined in terms of the gross value added per unit

of capital. Details of the capital productivity in the unorganised manufacturing sector

of India are given below:

Table 3.16 highlights the growth of capital productivity at current prices in

different types of enterprises for the periods 1994-95 to 2000-01 and 2000-01 to

2005-06, which has shifted from negative growth rate of 0.78 per cent per annum

during 1994-95 to 2000-01 to the positive growth rate of 1.18 per cent per annum

during 2000-01 to 2005-06. Another point to note is that in every type of enterprise,

the growth of capital productivity has remained much lower than that of the

corresponding rates of labour productivity (see Table 3.10 for comparison). The

OAMEs have shown a decline in the capital productivity and this decline became

sharper by the period 2000-01 to 2005-06. Similarly, NDMEs too have declining but

121

positive growth rate of capital productivity. It is only the DMEs, which have

registered an increase in the growth rate of capital productivity. The rural-urban

breakup shows that in the rural areas the growth of capital productivity has declined

by a sharper rate while the urban units have registered an increase in it. By the

terminal period, it can be observed that the urban units of NDMEs and DMEs have

shown higher growth rate of capital productivity than their rural counterparts while in

OAMEs, the capital productivity in urban units has declined at a sharper rate than in

the rural units. Somewhat different situation can be observed if we analyse the growth

of capital productivity at constant prices, which is given in Table 3.17. The table

shows that at the constant prices, the rate of growth of capital productivity has more

than doubled itself from 0.95 per cent per annum during 1994-95 to 2000-01 to 2.11

per cent per annum during 2000-01 to 2005-06. The rural-urban break-up shows that

in both the time periods though the capital productivity had grown at a positive rate in

both rural and urban areas, yet in rural areas, the rate of growth had declined from

1.68 per cent per annum during 1994-95 to 2000-01 to 0.93 per cent per annum during

2000-01 to 2005-06 whereas in the urban areas the same has increased manifold from

mere 0.20 per cent per annum during 1994-95 to 2000-01 to 3.20 per cent per annum

during 2000-01 to 2005-06. Among various types of enterprises, the table shows that

the DMEs have shown a laudable performance while the OAMEs have remained

laggards as far as growth of capital productivity is concerned. The growth of capital

productivity in OAMEs has changed from stagnancy during 1994-95 to 2000-01 to a

declining trend during 2000-01 to 2005-06, on the other hand in DMEs, it has

increased from a meagre rate of 0.98 per cent per annum during 1994-95 to 2000-01

122

to 6.58 per cent per annum during 2000-01 to 2005-06. While in NDMEs, it has

decreased from 2.14 per cent per annum in 1994-95 to 2000-01 to 1.16 per cent per

annum in 2000-01 to 2005-06. During both the time periods, the performance of both

the urban and rural OAMEs deteriorated but the urban OAMEs showed worse results

vis-à-vis their rural counterparts. On the other hand, in case of NDMEs and DMEs the

urban units improved their performance as compared to the previous time period. This

is the case in rural DMEs as well while the rural NDMEs showed negative growth of

capital productivity (-0.21 per cent per annum) as compared to previous time period.

Table 3.18 depicts the growth of capital productivity at current prices by

different industry groups. It is observed from the table that the growth of capital

productivity is positive only for six industries. All these industries have registered a

higher growth in capital productivity than the average growth during 1994-95 to

2000-01 (-0.78 per cent per annum). These are: manufacturing of rubber & plastic

products (7.94 per cent per annum), manufacturing of textiles (1.62 per cent per

annum), manufacturing of machineries (1.53 per cent per annum), manufacturing of

chemicals & chemical products (1.32 per cent per annum), manufacturing of paper &

paper products (0.59 per cent per annum) and manufacturing of agro foods (0.22 per

cent per annum). During this period the growth of capital productivity was highly

negative for the manufacturing of transport equipments, basic metals, non metallic

mineral products and wood & wood products. There is significant increase in the

capital productivity of various industries during 2000-01 to 2005-06 as the negative

growth in capital productivity is observed only for three industry groups in

comparison to seven industry groups in the preceding period. The industries which

123

show the high growth in capital productivity during this period are the manufacturing

of metal products (8.15 per cent per annum), machineries (5.92 per cent per annum),

non metallic mineral products (4.77 per cent per annum), leather & leather products

(3.71 per cent per annum) and transport equipments (3.26 per cent per annum). Of

these high growth industries, the manufacturing of leather & leather products,

manufacturing of non metallic mineral products, manufacturing of metal products and

transport equipments have turned themselves from the negative growth during 1994-

95 to 2000-01 to the high positive growth in capital productivity. On the other hand,

the sector of manufacturing of rubber and plastic products, which earlier registered

the higher growth of capital productivity, turned to negative growth over the period.

The study of growth of capital productivity on rural-urban basis shows that in the

rural areas seven industry groups have shown a positive growth while the remaining

six industries have registered negative growth in the capital productivity during 1994-

95 to 2000-01. The industries which show high growth are manufacturing of basic

metals (19.8 per cent per annum) and manufacturing of transport equipments (15.84

per cent per annum). On the other hand, the sectors of manufacturing of machineries,

paper & paper products and non metallic mineral products have shown high negative

growth in capital productivity during this period. In the succeeding period eight

industry groups registered a negative growth in comparison to six in the preceding

period. The industries which show high growth in capital productivity are non

metallic mineral products (9.24 per cent per annum) and manufacturing of paper &

paper products (7.63 per cent per annum). Both these industries have a negative

growth during the preceding period. The growth is highly negative for the industries

124

of manufacturing of basic metals (-16.87 per cent per annum), wood & wood products

(-4.09 per cent per annum), textiles (-2.51 per cent per annum) and metal products (-

1.67 per cent per annum). All these industries have a positive growth during the

period 1994-95 to 2000-01. The manufacturing of agro foods has netted a positive

growth in both the periods. In contrast to the rural units, an increase in the growth of

capital productivity can be observed in urban units (from -1.07 per cent per annum

during 1994-95 to 2000-01 to 2.05 per cent per annum during 2000-01 to 2005-06).

During the period 1994-95 to 2000-01, eight industry groups have shown a negative

growth (these are- manufacturing of basic metals, wood & wood products, transport

equipments and leather & leather products) while during 2000-01 to 2005-06, only

four industry groups have shown negative growth in urban areas. The industries like

manufacturing of metal products (10.82 per cent per annum), basic metals (8.75 per

cent per annum), and machineries (6.83 per cent per annum) have registered a high

positive growth during 2000-01 to 2005-06 in the urban areas.

Further, Table 3.19 shows the growth of capital productivity at constant

prices for different industry groups. It is observed from the table that during 1994-95

to 2000-01 six industry groups have shown a higher growth in capital productivity

than the average growth (0.95 per cent per annum). These industries are

manufacturing of rubber & plastic products (9.47 per cent per annum), manufacturing

of textiles (7.07 per cent per annum), manufacturing of machineries (4.65 per cent per

annum), manufacturing of paper & paper products (2.29 per cent per annum),

manufacturing of agro foods (1.54 per cent per annum) and manufacturing of

chemicals & chemical products (1.09 per cent per annum). A negative growth of

125

capital productivity can be observed for the industries of manufacturing of transport

equipments, manufacturing of basic metals, manufacturing of non-metallic mineral

products, manufacturing of leather & leather products and manufacturing of wood &

wood products during this period. However, during the period 2000-01 to 2005-06,

the growth of capital productivity is negative only for two industry groups i.e.

manufacturing of wood & wood products and manufacturing of basic metals. The

growth of capital productivity is the highest in the sector of manufacturing of

machineries (6.75 per cent per annum) followed by manufacturing of non metallic

mineral products (5.43 per cent per annum), manufacturing of leather & leather

products (4.53 per cent per annum) and manufacturing of chemicals & chemical

products (4.09 per cent per annum). The sectors of manufacturing of leather & leather

products, manufacturing of non-metallic mineral products, manufacturing of transport

equipments have made a turn-around from a negative growth to the positive one.

There is sharp decline in the growth of capital productivity for the industries of

manufacturing of textiles and manufacturing of rubber & plastic products over the

period. The rural-urban classification of the units shows that in the rural areas, though

the overall growth rate of capital productivity has declined, yet the sectors of

manufacturing of paper & paper products, manufacturing of machineries,

manufacturing of non-metallic mineral products, manufacturing of chemicals &

chemical products have improved their performance as compared to the previous

time period and this improvement is commendable in case of manufacturing of paper

& paper products (from -3.85 per cent per annum during 1994-95 to 2000-01 to 8.89

per cent per annum during 2000-01 to 2005-06) and manufacturing of non-metallic

126

mineral products (from -1.83 per cent per annum during 1994-95 to 2000-01 to 10.20

per cent per annum during 2000-01 to 2005-06). Rest of the sectors in rural areas have

experienced a decline in their growth of capital productivity and the worst performer

is the sector of basic metals. On the other hand, in urban areas, the sectors which

improved their performance are the sectors of manufacturing of leather & leather

products, chemicals & chemical products, basic metals, metal products, machineries

and transport equipments. While, the sectors of manufacturing of textiles and rubber

& plastic products have notably experienced a decline in their performance in case of

growth of capital productivity during 2000-01 to 2005-06 as compared to the previous

period.

Finally, the state-wise analysis of the growth of capital productivity at current

prices is given in Table 3.20. It is clear from the table that during the period 1994-95

to 2000-01 many states have registered a negative growth in the capital productivity.

These states are Haryana (-8.16 per cent per annum), Madhya Pradesh (-7.76 per cent

per annum), West Bengal (-3.44 per cent per annum), Punjab (-4.53 per cent per

annum) and Uttar Pradesh (-2.54 per cent per annum). On the other hand, the states of

Maharashtra (6.16 per cent per annum), Jammu & Kashmir (3.42 per cent per annum)

have registered comparatively better growth in the capital productivity. There is the

improvement in the growth of capital productivity during 2000-01 to 2005-06 as

fewer states have registered a negative growth. The states which have shown high

growth are Uttar Pradesh (4.16 per cent per annum), Orissa (4.08 per cent per annum),

Himachal Pradesh (3.90 per cent per annum) and Maharashtra (3.59 per cent per

annum). On the other hand, Andhra Pradesh (-6.58 per cent per annum), Haryana (-

127

2.91 per cent per annum), Kerala (-2.74 per cent per annum) and West Bengal (-2.45

per cent per annum) have registered a high negative growth in the capital productivity

during 2000-01 to 2005-06. The states of Gujarat, Himachal Pradesh, Karnataka,

Madhya Pradesh, Punjab and Uttar Pradesh had a turn-around from the negative

growth to a positive one. Whereas, the states of Andhra Pradesh, Bihar and Jammu &

Kashmir have turned themselves from the positive growth to negative one over the

period and the growth of capital productivity in the states of Haryana, Kerala, Tamil

Nadu and West Bengal have remained negative over the entire period. Another

interesting point to note in the table is that in the unorganised manufacturing sector of

India, the rural units have shown a declining trend in the growth of capital

productivity and the urban units have shown an increase in capital productivity (from

a negative growth rate to a positive one). Among the rural units, the maximum

improvement can be seen in case of West Bengal and the steepest decline in case of

Jammu and Kashmir and in case of urban units such states are Himachal Pradesh and

Andhra Pradesh, respectively.

For a more real picture, we can see the state-wise growth of capital

productivity at constant prices which is shown in Table 3.21. Here too, Maharashtra

had shown the highest growth rate of capital productivity and Haryana the lowest one

during 1994-95 to 2000-01 and these respective positions have been taken by the

states of Uttar Pradesh and Andhra Pradesh by the period 2000-01 to 2005-06. It can

be observed that except the states of Bihar, Jammu and Kashmir, Kerala, Maharashtra

and Tamil Nadu all the states have shown an increase in the growth rate of capital

productivity during2000-01 to 2005-06 as compared to the previous time period. The

128

rural urban break-up shows that during 1994-95 to 2000-01, the rural units of Jammu

and Kashmir and urban units of Maharashtra were the best performers and this

position was taken over by Karnataka and Himachal Pradesh, respectively, by the

period 2000-01 to 2005-06.

The comparative analysis of labour productivity and capital productivity at all

India level at the constant prices shows that there is positive growth in labour

productivity (4.59 per cent per annum) in comparison to a negative growth (- 0.95 per

cent per annum) for capital productivity during the period 1994-95 to 2000-01. This

positive growth of labour productivity can be observed both in rural and urban areas

though the rate of increase is much higher in the rural areas. In the succeeding period

the growth in labour productivity is 4.08 per cent per annum again higher than the

growth of capital productivity (2.11 per cent per annum). So, the growth of labour

productivity has a significant edge over the growth of capital productivity for the

period 1994-95 to 2000-01 and 2000-01 to 2005-06. However, it is still blamed that

the unorganised manufacturing sector and its workers are very less efficient as

compared to their organised counterparts. But rushing to this conclusion just by

comparing the average output levels of the two sectors becomes questionable as the

access to inputs is also unequal for these two different types of sectors. It is accepted

that there is a segment within the unorganised sector which is suffering from many

problems. These problems are discussed below.

The Problems Faced by the Unorganised Manufacturing Sector

The unorganised manufacturing sector, being dominated by very small family

based enterprises, generally face many problems. These problems are like problem of

129

non-availability of electricity connection, power cuts, shortage of capital, non-

availability of raw materials, marketing of products/services, local problems, problem

of competition from larger units, labour problems, fuel problem, non-recovery of

service charges and lack of infrastructure. As a result of these problems, these

unorganised manufacturing units are having large under-utilised and low-productive

labour force (Mukherjee, 2009). So, here an attempt has been made to analyse the

extent of these problems in the unorganised manufacturing sector of India during

2005-06. These are given in tabular form in Table 3.22 to 3.25. The tables show that

about 68 per cent of the enterprises have to face some problems on one pretext or

another. A big chunk of them (42 per cent) face the problem of shortage of capital and

this problem is more acute in case of the NDMEs (with 49.6 per cent units struggling

with the problem of shortage of capital) (see Table 3.22). About 33 per cent of the

DMEs and 32 per cent of the NDMEs face the problem of power cuts. A big number

of these enterprises also face the problem of competition from larger units. In case of

OAMEs, these two problems are lesser in degree as compared to other type of

enterprises due to simple processes of production and sales in local market. However,

as compared to NDMEs and DMEs they suffer to a greater extent in case of getting

electricity connection, procuring raw materials, recovering service charges and

availability of required infrastructure. Now for a deeper insight we shall analyse these

problems in different sectors in the unorganised manufacturing sector of India (Table

3.23 to 3.25).

Table 3.23 highlights the problems of various industry groups at all India

level for the period 2005-06.The sectors of manufacturing of paper & paper products,

130

manufacturing of chemicals & chemical products, manufacturing of tobacco products

are least affected by any specific problem. The problem of shortage of capital has

affected the maximum number of units in almost all the industry groups. The

industries which are most affected by this problem are manufacturing of motor

vehicles, recycling, manufacturing of basic metals, manufacturing of metal products

and manufacturing of leather & leather products. The second largest problem faced by

the units in unorganised manufacturing sector of India which has affected various

industry groups is the problem of marketing of products. The industry groups of

manufacturing of non metallic mineral products, manufacturing of communication

equipments, manufacturing of medical instruments and manufacturing of wood &

wood products have largely been affected by this problem.

Another problem which has its effect on maximum number of industries is the

problem of competition from the larger units. This problem has affected mostly the

industries of manufacturing of coke and petroleum, manufacturing of motor vehicles,

manufacturing of communication equipment and manufacturing of paper & paper

products. The problem of power cut has shown its maximum effect on the sectors of

transport equipments, manufacturing of motor vehicles, manufacturing of electric

machineries and recycling. In rural areas, the industry groups which face least

problems are manufacturing of office machineries, manufacturing of paper & paper

products and manufacturing of tobacco products and recycling (Table 3.24). Shortage

of capital is the main problem faced by the rural units. The sectors which are more

affected by this problem are manufacturing of motor vehicles, manufacturing of

leather & leather products, manufacturing of metal & metal products, manufacturing

131

of transport equipments and basic metals. The sectors of manufacturing of non-

metallic mineral products, manufacturing of communication equipments,

manufacturing of medical equipments and manufacturing of wood & wood products

have been affected by the problem of marketing of products. The problem of non

availability of raw materials has a significant bearing on the industries of

manufacturing of medical equipments, manufacturing of basic metals, and

manufacturing of leather & leather products, whereas the problem of non availability

of electricity connection has affected the industries of manufacturing of tobacco

products, manufacturing of food products and manufacturing of wood & wood

products.

On the other hand, in urban areas, the industries which are least affected by

any specific problem are manufacturing of chemicals & chemical products,

manufacturing of tobacco products, manufacturing of textiles and manufacturing of

furniture (Table 3.25). Like the rural areas the problem of shortage of capital has

affected most of the sectors. The most affected sectors facing this problem are

manufacturing of coke and petroleum, cotton ginning, recycling, manufacturing of

non-metallic mineral products and manufacturing of office machineries. The

industries which are affected the most by the problem of power cut are manufacturing

of transport equipments, manufacturing of communication equipments, manufacturing

of electric machineries and manufacturing of basic metals. Another bigger problem

faced by the urban industrial units is that of competition from larger units. The

industries of medical instruments, recycling, manufacturing of motor vehicles,

publishing and printing have been affected the most by this specific problem.

132

To sum up, we can say that the problem of shortage of capital is the biggest

problem equally faced by the unorganised manufacturing sector units in the rural and

urban areas. The problem of marketing of products is the second biggest problem in

the rural areas, followed by the problem of non availability of the raw materials, non

availability of electricity connection and problem of competition from larger units. On

the other hand, power cut is the second biggest problem in the urban units followed by

competition from the larger units and marketing of products.

Determinants of Productivity

Above analysis has shown the growth of total and partial productivities and

the problems faced by the unorganised manufacturing units in various types of

enterprises, sectors and regions. We have observed startling variations in these growth

rates during the period under study. Whereas some of the sectors/regions/enterprises

have shown a very high growth rate, the other ones are showing poor or deteriorating

performance. So, it would be quite relevant to know about various factors which may

affect the level of productivity in a particular unit. It is generally assumed that the

enterprises with higher capital intensity, easy access to required inputs such as raw

materials, capital and other infrastructural facilities show higher level of productivity

as compared to the enterprises which suffer from the problems regarding availability

of these inputs. Besides, it is also assumed that female workers are less productive as

compared to their male counterparts so as a priori an enterprise with higher share of

males in its total workers may show higher level of productivity. Keeping these things

in view, here an attempt has been made to find out the relationship of various factors

with productivity in unorganised manufacturing sector of a particular area. The

133

variables regarding the easy availability of capital, raw material, power and

infrastructure have been derived from percentage of those enterprises who have

reported suffering from the problem of the availability of these factors.

The results are shown in Table 3.26 and 3.27. In these tables a strong positive

relationship of productivity can be observed with capital-labour ratio, availability of

land, loan per enterprise (a proxy for access to capital), and share of male workers in

total employment and availability of raw materials in both the years. However, in

2005-06, it can be observed that productivity is also higher in the regions where there

is no problem of the infrastructure and the education status of the working owners is

higher (the data on education status of the working owner is not available for the year

2000-01). Interestingly, availability of power has a strong negative impact on the

productivity of enterprises in the unorganised manufacturing sector and this negative

impact is more powerful in case of OAMEs, whereas the level of productivity in

DMEs has a weak relationship with availability of power. It seems that traditionally

operated OAMEs may do well without the availability of power and its availability

rather may unduly increase their operating expenses leading to lower value addition

(or say, productivity). During 2000-01, for rural OAMEs, higher capital intensity,

land per enterprise had significant positive impact on productivity. However, during

the year 2005-06, the enterprises with higher share of male workers showed higher

level of productivity. The productivity in urban OAMEs is significantly affected by

the capital intensity, availability of loan, share of male workers and education status

of the working owner. For NDMEs in rural areas, the availability of fuel, raw

materials and education status of the working owner seem to be positively influencing

134

the productivity, while in urban areas, the capital-intensity, availability of land, loan

and power and the education status of the working owner positively affect the level of

productivity. Interestingly, for NDMEs the share of male workers had never remained

a significant factor influencing productivity. Lastly, the capital intensity, availability

of land and loan have a significant impact on the productivity level of the DMEs in

both rural and urban areas. It is only the urban DMEs, which urgently need easy

availability of power for raising their level of productivity. Going by the results of the

terminal year, we can say that the state governments can contribute in raising the

productivity of enterprises in the unorganised manufacturing sector by improving the

infrastructural facilities, loan facilities etc. without much pressure on increasing

supply of power and fuel to this particular sector.

To sum up, we can say that OAMEs are the least productive enterprises among

all types of enterprises in the unorganised manufacturing sector of India. On the other

hand, the DMEs have been the fastest growing enterprises in case of productivity. The

sector-wise analysis has shown that still more than half of the gross value added is

contributed by the traditional sector of manufacturing of agro foods, textiles and wood

& wood products. These sectors, however, face the lower growth rates of capital as

well as labour productivity as compared to modern units. The traditional units are low

productive due to lot of problems faced by them e.g. on account of availability of

capital, marketing of products, competition from larger units, power cuts etc. Actually

productivity is positively associated with access to required inputs, education level of

the working owners and percentage of male workers out of total workers.

135

REFERENCES

Aghion P., Burgess R., Redding S. and Ziliboti F. (2008), The Unequal Effects of

Liberalization: Evidence from Dismentalling the License Raj in India,

American Economic Review, Vol. 98, No. 4.

Ahluwalia, I. J. (1991), Productivity and Growth in Indian Manufacturing, Oxford

University Press, New Delhi.

Balakrishnan, P. and K. Pushpangadan (1994), “Total Factor Productivity Growth in

Manufacturing Industry: A Fresh Look”, Economic and Political Weekly, Vol.

31, No. 29.

Balakrishnan P., K. Pushpangadan, and M. Suresh Babu (2000), “Trade Liberalization

and Productivity Growth in Manufacturing: Evidence From Firm-Level Panel

Data”, Economic and Political Weekly, Vol. 37, No. 35.

Bhalla, S. (2001), “Assessing the Quality of Employment Growth using National

Sample Survey Data”, Paper presented at the National Sample Survey

Organisation‟s Golden Jubilee Seminar on „Understanding Human

Development through National Surveys‟, March, Pune.

Bhalotra, Sonia R. (1998), “The Puzzle of Jobless Growth in Indian Manufacturing”,

Oxford Bulletin of Economics and Statistics, Vol. 60, No. 1.

Brahmananda, P. R. (1982), Productivity in the Indian Economy: Rising Inputs For

Falling Output, Himalaya Publishing House, Mumbai.

Chadha, G. K. (1999), “Non-farm Sector in Rural India: Past Experience and Future

Growth Strategies”, I. F. P. R. I. Seminar, November.

Dholkia, R. H. and Dholkia, B. H. (1994), “Total Factor Productivity Growth in

Indian Manufacturing”, Economic and Political Weekly, Vol. 31, No. 29.

Economic Survey (2008), Economic Survey 2007-08, Ministry of Finance,

Government of India, New Delhi.

Goldar, B. and Arup Mitra (1999), “Productivity Growth in Informal Sector in India”,

Paper Presented at the Workshop on Measurement of Productivity in India,

July.

136

Goldar, B. (2000), “TFP Growth in Indian Manufacturing in the 1980s”, Economic

and Political Weekly, Vol. 35, No. 49.

Golder B., Arup Mitra and Anita Kumari (2003), “Performance of Unorganized

Manufacturing in the Post Reform Period”, Paper Presented at the National

Seminar on the Results of NSSO 56th

Round on March 21, 2003 at New Delhi.

Golder, B. and Suresh Chand Aggarwal (2004), “Trade Liberalization and Price-Cost

Margin In Indian Industries”, Working Paper No.130, Indian Council for

Research on International Economic Relations, New Delhi.

Krishna, K. L. (1970), “Total Factor Productivity: Concept and Measurement”, NPC

Productivity Journal, Vol. 4.

Krishna, P. and D. Mitra (1998), “Trade Liberalization, Market Discipline and

Productivity Growth: New Evidence from India”, Journal of Development

Economics, 56: 451-76

Kumar, Surinder (2004), “A Decomposition of Total Factor Productivity Growth: A

Regional Analysis of Indian Industrial Manufacturing Growth”, Working

Paper No. 22, NIPFP, New Delhi.

Mukherjee, D. (2004), “Productivity in Small Manufacturing Enterprises:

Determinants and Policy Issues”, The Indian Journal of Labour Economics,

Vol. 47, No. 2.

- (2009), Informal Sector in Indian Economy: The Way Ahead, Rawat

Publication, Jaipur.

N. A. S. (2007), National Account Statistics- Sources and Methods, Chapter 13, CSO,

Government of India, New Delhi.

NCEUS (2007), “Report On Condition of Work and Promotion of Livelihood in

Unorganized Sector”, Govt of India, New Delhi.

Oberoi, A. S. and G. K. Chadha (2001), “Job creation in Urban Informal Sector in

India: Some Macro-Economic Policy Issues”, in A. S. Oberoi and G. K.

Chadha (eds.), Job Creation in Urban Informal Sector in India: Issues and

Policy Options, SAAT-ILO, New Delhi.

137

Pattnayak, S. S. and Thangavelu, S. M. (2003), “Economic Reform and Productivity

Growth in Indian Manufacturing Industries: An Interaction of Technical

Change and Scale Economies”, Economic Modeling, Vol. 22, No.4.

Pulapre Balakrishnan (2004), “Measurement of Manufacturing Sector Productivity”,

Economic and Political Weekly, Vol. 41, No.14.

Rani, Uma and Unni, Jeemol (2004), “Unorganised and Organised Manufacturing in

India: Potential for Employment Generating Growth”, Economic and Political

Weekly, Vol. 41, No. 39.

Rao, J. M. (1996), “Manufacturing Productivity Growth: Method and Measurement”,

Economic and Political Weekly, Vol. 33, No. 41.

Ray, S. C. (1997), “Regional Variations in Productivity Growth in Indian

Manufacturing: A Non Parametric Analysis”, Journal of Quantitative

Economics, 13, 73-94.

- (2002), “Did India‟s Economic Reforms Improve Efficiency and Productivity?

A Non Parametric Analysis of Initial Evidence from Manufacturing”, Indian

Economic Review, 37, 23-57.

Shah (2002), “Making Informal Sector Viable and Growth Oriented”, Paper presented

at the National Seminar on „Making Informal Sector Viable and Growth

Oriented‟ at Sardar Patel Institute of Economic and Social Research,

Ahmedabad, September.

Unel, Bulent (2003), “Productivity Trends in India‟s Manufacturing Sectors in the

Last Two Decades”, IMF working Paper No WP/03/22

Unni, J., Lalitha, N. and Rani, Uma (2001), “Economic Reforms and Productivity

Trends in Indian Manufacturing”, Economic and Political Weekly, Vol. 36,

No. 41.

Table 3.1

Percentage Share of Gross Value Added, Fixed Assets and Employment in Unorganised Manufacturing Sector in India by

Type of Enterprise

Gross Value Added Fixed Assets Employment

YEAR Type of Enterprise Rural Urban Combined Rural Urban Combined Rural Urban Combined

1994-95

OAMEs 64.17 28.41 43.12 59.01 24.78 37.63 80.65 43.49 68.25

NDMEs 14.49 29.75 23.46 20.17 31.90 27.50 8.27 27.60 14.72

DMEs 21.34 41.84 33.42 20.82 43.31 34.87 11.08 28.91 17.03

All Enterprises 100 100 100 100 100 100 100 100 100

2000-01

OAMEs 63.05 25.75 42.28 62.28 24.85 39.23 79.83 45.16 67.59

NDMEs 13.84 33.91 25.02 14.85 34.63 27.03 8.06 27.71 15.00

DMEs 23.11 40.34 32.70 22.87 40.52 33.74 12.11 27.13 17.41

All Enterprises 100 100 100 100 100 100 100 100 100

2005-06

OAMEs 49.60 18.44 32.01 53.35 24.72 36.24 76.82 43.64 64.99

NDMEs 16.83 29.67 24.08 19.23 32.46 27.14 10.16 26.15 15.86

DMEs 33.57 51.88 43.91 27.42 42.82 36.62 13.02 30.21 19.15

All Enterprises 100 100 100 100 100 100 100 100 100

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479,480), NSSO 2007 (Report No. 526),

NSSO 2008 (Report No. 525) 138

139

Table 3.2

Percentage Share of Gross Value Added, Fixed Assets and Employment in

Unorganised Manufacturing Sector in India by Industry Group

Industry Name

Gross Value Added Fixed Assets Employment

1994-

95

2000-

01

2005-

06

1994-

95

2000-

01

2005-

06

1994-

95

2000-

01

2005-

06

Agro Foods 19.61 21.62 20.98 22.61 23.95 24.45 25.11 27.64 26.19

Textiles 17.84 27.05 24.73 19.32 25.69 26.93 20.17 29.04 30.99

Wood & Wood

Products 12.41 9.18 6.15 8.41 6.73 5.50 16.24 14.08 11.14

Paper & Paper

Products 2.82 3.57 3.16 4.41 5.19 4.52 1.67 1.97 2.10

Leather & Leather

Products 2.08 1.57 1.55 1.12 1.04 0.91 1.52 1.48 1.30

Chemicals &

Chemical Products 1.20 1.54 1.85 1.68 1.94 2.20 1.06 1.53 2.37

Rubber & Plastic

Products 2.44 2.25 1.70 4.84 2.74 2.33 0.99 0.96 0.82

Non-Metallic

Mineral Products 5.72 8.14 7.53 4.08 6.77 5.35 7.82 8.23 6.41

Basic Metals 0.96 1.02 1.33 0.89 1.25 1.56 0.37 0.36 0.31

Metal Products 6.46 6.35 10.28 7.30 7.22 8.44 3.87 4.28 4.55

Machineries 3.44 5.05 6.38 4.69 6.05 6.14 1.30 2.13 2.42

Transport

Equipments 0.97 1.27 1.21 1.21 2.29 1.98 0.38 0.46 0.56

n.e.c. * 24.00 11.40 13.14 19.45 9.16 9.68 19.56 8.25 8.10

All 100 100 100 100 100 100 100 100 100

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479,480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

Note: *n.e.c. : Not elsewhere classified

140

Table 3.3

State-wise Percentage Share of Gross Value Added, Fixed Assets and

Employment in Unorganised Manufacturing Sector in India

Name of State

Gross Value Added Fixed Assets Employment

1994-

95

2000-

01

2005-

06

1994-

95

2000-

01

2005-

06

1994-

95

2000-

01

2005-

06

Andhra Pradesh 5.08 6.53 5.27 4.60 4.89 5.85 7.68 8.90 6.69

Bihar 5.17 5.07 3.84 4.12 3.66 3.11 7.64 6.52 6.59

Gujarat 9.63 6.91 7.23 10.57 7.67 7.57 5.46 4.01 5.08.

Haryana 2.29 1.88 3.14 2.34 3.05 6.24 1.01 1.13 1.49

Himachal Pradesh 0.40 0.54 0.62 0.50 0.79 0.78 0.45 0.42 0.45

Jammu & Kashmir 0.16 1.63 1.39 0.21 1.45 1.37 0.21 1.27 0.88

Karnataka 4.46 4.85 6.38 4.46 5.02 5.90 5.57 8.48 2.67

Kerala 2.01 3.37 3.92 1.94 3.66 5.17 2.05 2.89 3.82

Madhya Pradesh 4.55 3.42 3.86 3.13 3.69 4.38 3.11 5.22 6.03

Maharashtra 13.63 12.63 15.70 20.16 12.71 13.91 7.33 8.02 7.96

Orissa 2.60 1.99 2.17 2.13 1.46 1.39 9.32 5.93 5.55

Punjab 3.19 3.70 2.59 3.88 5.86 4.35 1.66 2.01 1.65

Rajasthan 3.31 3.87 4.32 3.67 4.27 4.53 2.63 3.09 3.55

Tamil Nadu 10.87 10.03 9.41 10.23 10.24 11.18 8.69 9.29 9.25

Uttar Pradesh 15.37 12.11 14.50 13.44 12.02 12.38 17.87 15.16 14.92

West Bengal 9.39 12.21 9.57 4.76 7.42 6.95 13.19 15.83 15.08

North Eastern

States 1.95 2.01 2.64 1.49 1.11 1.38 2.72 1.97 2.71

Union Territories 5.89 7.24 13.43 8.34 10.99 3.56 2.53 2.86 1.51

ALL 100 100 100 100 100 100 100 100 100

Source: Calculated from NSSO 1998 (Report No. 434), NSSO 2002 (Report No. 479,480),

NSSO 2007 (Report No. 526), NSSO 2008 (Report No 525)

Note:

* North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi

* Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

141

Table 3.4

Growth rate of Gross Value Added in Unorganised Manufacturing Sector in

India by Type of Enterprise at Current Prices

1994-95 to 2000-01 2000-01 to 2005-06

OAMEs

Rural 9.13 2.26

Urban 3.03 1.68

Combined 7.20 1.85

NDMEs

Rural 12.45 7.95

Urban 9.48 6.36

Combined 10.76 6.22

DMEs

Rural 17.06 13.30

Urban 7.25 12.91

Combined 10.65 12.94

All Enterprises

Rural 9.44 6.77

Urban 5.78 8.71

Combined 7.91 7.59

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

142

Table 3.5

Growth Rate of Gross Value Added in Unorganised Manufacturing Sector in

India by Type of Enterprise at Constant Prices (1993-94 prices)

1994-95 to 2000-01 2000-01 to 2005-06

OAMEs

Rural 4.88 -1.46

Urban -0.97 -2.04

Combined 3.04 -1.89

NDMEs

Rural 8.09 4.02

Urban 5.24 2.49

Combined 6.47 2.35

DMEs

Rural 12.52 9.16

Urban 3.09 8.79

Combined 6.35 8.82

All Enterprises

Rural 5.19 2.88

Urban 1.68 4.75

Combined 3.73 3.67

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

143

Table 3.6

Growth Rate of Gross Value Added in Unorganised Manufacturing Sector in

India by Industry Group at Current Prices

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 8.14 6.59 4.85 6.43 7.41 5.94

Textiles 4.57 4.85 -1.02 3.04 4.06 3.76

Wood &

Wood

Products

9.34 5.39 2.99 6.90 5.88 5.76

Paper & Paper

Products 15.15 -5.35 8.03 6.73 9.99 0.88

Leather &

Leather

Products

10.06 14.26 7.26 5.23 9.15 11.84

Chemicals &

Chemical

Products

11.49 -4.82 6.09 7.29 7.68 -1.49

Rubber &

Plastic

Products

12.68 13.81 6.61 5.78 6.02 7.64

Non-Metallic

Mineral

Products

18.79 12.21 15.43 8.61 18.44 11.50

Basic Metals 18.84 10.40 7.56 19.47 9.61 16.23

Metal Products 7.82 9.99 3.85 23.32 4.23 19.51

Machineries 9.25 11.23 4.66 7.70 5.99 8.59

Transport

Equipments 19.64 14.12 8.31 4.96 10.19 5.72

n.e.c. 18.11 14.63 10.30 14.26 13.94 14.36

All 9.44 6.77 5.78 8.71 7.91 7.59

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

144

Table 3.7

Growth Rate of Gross Value Added in Unorganised Manufacturing Sector in

India by Industry Group at Constant Prices (1993-94 prices)

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 3.76 2.58 0.61 2.41 3.06 1.94

Textiles 4.28 3.18 -1.29 1.40 3.76 2.12

Wood &

Wood

Products

5.09 1.56 -0.99 3.00 1.77 1.89

Paper & Paper

Products 10.69 -8.80 3.84 2.84 5.73 -2.80

Leather &

Leather

Products

5.79 10.09 3.10 1.39 4.91 7.75

Chemicals &

Chemical

Products

5.39 -7.38 0.29 4.40 1.79 -4.15

Rubber &

Plastic

Products

8.31 9.66 2.47 2.06 1.91 3.71

Non-Metallic

Mineral

Products

14.18 8.12 10.96 4.65 13.85 7.43

Basic Metals 13.81 1.04 3.00 9.34 4.97 6.38

Metal

Products 3.26 0.66 -0.54 12.87 -0.18 9.38

Machineries 6.57 7.34 2.10 3.93 3.40 4.78

Transport

Equipments 14.99 9.95 4.11 1.13 5.92 1.86

n.e.c. 51.72 10.44 6.02 10.09 9.52 10.19

All 5.19 2.88 1.68 4.75 3.73 3.67

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

145

Table 3.8

State-wise Growth Rate of Gross Value Added in Unorganised Manufacturing

Sector in India at Current Prices

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 11.10 7.63 8.32 -0.97 10.76 4.56

Bihar 14.29 -0.93 6.12 6.58 12.25 0.82

Gujarat 5.23 3.80 9.69 5.18 7.46 4.73

Haryana 0.13 16.89 2.08 14.74 1.51 15.46

Himachal

Pradesh 18.90 -3.04 17.90 35.29 17.38 8.02

Jammu &

Kashmir 30.67 8.28 5.13 12.43 22.37 8.29

Karnataka 9.74 18.82 5.69 13.59 8.67 15.68

Kerala 8.88 7.78 15.71 -2.33 10.48 5.39

Madhya Pradesh 4.66 13.18 -4.06 2.90 -1.50 8.79

Maharashtra 9.48 8.45 2.55 14.87 3.03 14.87

Orissa 13.16 7.78 6.99 12.32 12.25 10.76

Punjab 8.77 0 9.19 3.71 7.98 3.71

Rajasthan 8.95 9.19 7.87 10.07 8.25 10.15

Tamil Nadu 3.09 12.89 5.41 3.77 4.91 6.96

Uttar Pradesh 7.81 4.75 6.81 17.98 6.99 11.63

West Bengal 10.83 0 4.39 9.73 9.11 2.80

North Eastern

States 15.03 9.63 6.99 9.50 14.96 7.96

Union

Territories 9.84 37.81 7.58 5.13 9.20 8.26

ALL 9.44 6.77 5.78 8.71 7.91 7.59

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

Note: * North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi * Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

146

Table 3.9

State-wise Growth Rate of Gross Value Added in Unorganised Manufacturing

Sector in India at Constant Prices (1993-94 prices)

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 6.81 3.69 4.12 -4.59 6.43 0.75

Bihar 9.86 -4.54 2.01 2.68 7.90 -2.86

Gujarat 1.14 0.02 5.44 1.34 3.30 0.91

Haryana -3.75 12.62 -1.87 10.55 -2.42 11.24

Himachal

Pradesh 14.29 -6.57 13.33 30.35 12.82 4.08

Jammu &

Kashmir 25.61 4.33 1.05 8.33 17.62 4.35

Karnataka 5.48 14.49 1.59 9.45 4.46 11.46

Kerala 4.65 3.85 11.22 -5.89 2.86 5.51

Madhya Pradesh 0.60 9.04 -7.78 -0.84 -5.33 4.81

Maharashtra 5.23 4.49 -1.43 10.68 -0.97 10.68

Orissa 8.77 3.85 2.84 8.22 7.88 6.72

Punjab 4.55 -4.00 4.96 -0.07 3.79 -0.07

Rajasthan 4.72 5.21 3.69 6.05 4.05 6.13

Tamil Nadu -0.90 8.77 1.33 -0.01 0.84 3.06

Uttar Pradesh 3.62 0.92 2.67 13.67 2.84 7.55

West Bengal 6.53 -3.65 0.34 5.73 4.87 -0.94

North Eastern

States 10.57 5.63 2.84 5.50 10.50 4.02

Union Territories 5.58 32.78 3.42 1.29 4.97 4.31

ALL 5.19 2.88 1.68 4.75 3.73 3.67

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

Note: * North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi * Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

147

Table 3.10

Growth rate of Labour Productivity in Unorganised Manufacturing Sector in

India by Type of Enterprise at Current Prices

1994-95 to 2000-01 2000-01 to 2005-06

OAMEs

Rural 10.56 3.59

Urban 4.40 1.96

Combined 8.62 3.08

NDMEs

Rural 10.33 7.07

Urban 9.08 6.62

Combined 9.63 6.13

DMEs

Rural 10.52 14.57

Urban 7.28 11.41

Combined 8.02 12.55

All Enterprises

Rural 10.32 7.59

Urban 7.06 8.26

Combined 8.81 8.02

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

148

Table 3.11

Growth rate of Labour Productivity in Unorganised Manufacturing Sector in

India by Type of Enterprise at Constant Prices (1993-94 prices)

1994-1995 to 2000-01 2000-01 to 2005-06

OAMEs

Rural 6.27 -0.19

Urban 0.35 -1.76

Combined 4.41 -0.68

NDMEs

Rural 6.05 3.17

Urban 4.85 2.73

Combined 5.38 2.25

DMEs

Rural 6.24 10.39

Urban 3.12 7.34

Combined 3.83 8.45

All Enterprises

Rural 6.04 3.66

Urban 2.91 4.31

Combined 4.59 4.08

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) & NSSO

2007 (Report No. 526)

149

Table 3.12

Growth Rate of Labour Productivity in Unorganised Manufacturing Sector in

India by Industry Group at Current Prices

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 9.56 7.43 6.96 6.04 8.93 6.58

Textiles 10.34 6.29 6.68 3.79 9.86 4.91

Wood &

Wood

Products 9.04 5.09 4.86 4.72 6.06 4.67

Paper & Paper

Products 16.31 -0.96 8.60 7.31 10.23 4.29

Leather &

Leather

Products

11.44 3.30 9.12 2.36 10.08 3.87

Chemicals &

Chemical

Products

7.69 1.88 7.93 8.70 6.77 2.85

Rubber &

Plastic

Products 9.45 8.42 8.88 5.19 7.90 5.58

Non-Metallic

Mineral

Products 14.59 12.64 13.38 9.38 14.54 11.97

Basic Metals 18.65 13.11 8.01 19.95 10.70 17.51

Metal Products 9.66 8.82 6.58 20.32 6.83 17.68

Machineries 9.78 13.10 6.40 9.93 6.96 10.47

Transport

Equipments 20.29 1.35 8.92 4.67 10.34 3.18

n.e.c. 15.52 12.98 7.78 10.95 11.01 11.71

All 10.32 7.59 7.06 8.26 8.81 8.02

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

150

Table 3.13

Growth Rate of Labour Productivity in Unorganised Manufacturing Sector in

India by Industry Group at Constant Prices (1993-94 prices)

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 5.13 3.37 2.64 2.03 4.53 2.55

Textiles 10.03 4.61 6.38 2.14 9.55 3.24

Wood & Wood

Products 4.81 1.26 0.79 0.90 1.95 0.85

Paper & Paper

Products 11.80 -4.58 4.39 3.40 5.96 0.48

Leather &

Leather

Products

7.11 -0.47 4.89 -1.37 5.81 0.08

Chemicals &

Chemical

Products

1.80 -0.87 2.02 5.78 0.93 0.07

Rubber &

Plastic

Products

5.20 4.47 4.66 1.36 3.72 1.73

Non-Metallic

Mineral

Products

10.15 8.53 8.98 5.39 10.09 7.89

Basic Metals 13.63 3.53 3.44 9.79 6.05 7.55

Metal Products 5.02 -0.40 2.07 10.12 2.30 7.71

Machineries 7.09 9.14 3.79 6.08 4.34 6.60

Transport

Equipments 15.63 -2.35 4.70 0.85 6.06 -0.59

n.e.c. 11.04 8.87 3.59 6.90 6.70 7.63

All 6.04 3.66 2.91 4.31 4.59 4.08

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

151

Table 3.14

State-wise Growth Rate of Labour Productivity in Unorganised Manufacturing

Sector in India at Current Prices

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 11.30 8.34 9.60 1.06 10.79 5.69

Bihar 13.60 1.23 6.85 4.51 11.40 2.03

Gujarat 5.72 4.63 10.17 3.61 8.51 4.09

Haryana 3.71 15.34 1.89 12.52 3.20 13.50

Himachal

Pradesh 18.20 -2.62 15.19 31.22 16.56 8.94

Jammu &

Kashmir 22.85 12.45 4.64 16.53 15.87 13.04

Karnataka 12.81 17.26 6.60 12.64 10.75 14.49

Kerala 11.34 7.31 14.57 -0.47 12.25 5.37

Madhya

Pradesh 4.84 11.31 -2.54 3.32 -0.64 7.66

Maharashtra 12.36 8.96 4.83 12.74 5.89 13.14

Orissa 12.74 9.65 6.36 11.29 12.30 11.49

Punjab 8.41 3.14 8.99 4.40 8.23 4.79

Rajasthan 9.38 7.56 7.91 7.26 8.84 7.48

Tamil Nadu 5.24 11.86 6.54 4.40 6.29 6.83

Uttar Pradesh 7.83 6.70 6.85 17.56 7.58 12.49

West Bengal 12.08 1.82 7.23 7.54 10.37 4.01

North Eastern

States 17.37 7.85 7.96 7.79 15.58 7.18

Union

Territories 11.98 29.56 9.75 3.04 10.55 5.83

ALL 10.32 7.59 7.06 8.26 8.81 8.02

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

Note: * North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi * Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

152

Table 3.15

State-wise Growth Rate of Labour Productivity in Unorganised Manufacturing

Sector in India at Constant Prices (1993-94 prices)

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 6.98 4.39 5.35 -2.62 6.49 1.82

Bihar 9.20 -2.47 2.71 0.69 7.13 -1.69

Gujarat 1.62 0.81 5.90 -0.17 4.30 0.29

Haryana -0.31 11.13 -2.07 8.41 -0.80 9.35

Himachal

Pradesh 13.62 -6.17 10.72 26.43 12.04 4.96

Jammu &

Kashmir 18.09 8.35 0.58 12.27 11.37 8.91

Karnataka 8.43 12.98 2.46 8.52 6.45 10.30

Kerala 7.02 3.39 10.13 -4.10 7.90 1.52

Madhya

Pradesh 0.77 7.25 -6.32 -0.44 -4.50 3.72

Maharashtra 8.00 4.99 0.77 8.62 1.78 9.01

Orissa 8.36 5.64 2.24 7.23 7.94 7.42

Punjab 4.20 -0.63 4.76 0.59 4.03 0.96

Rajasthan 5.14 3.64 3.73 3.34 4.62 3.55

Tamil Nadu 1.16 7.78 2.41 0.59 2.17 2.93

Uttar Pradesh 3.65 2.81 2.70 13.27 3.40 8.38

West Bengal 7.73 -1.89 3.07 3.61 6.09 0.21

North Eastern

States 12.82 3.90 3.78 3.85 11.09 3.26

Union

Territories 7.64 24.83 5.49 -0.71 6.26 1.96

ALL 6.04 3.66 2.91 4.31 4.59 4.08

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 480) &

NSSO 2007 (Report No. 526)

Note: * North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi * Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

153

Table 3.16

Growth Rate of Capital Productivity in Unorganised Manufacturing Sector in

India by Type of Enterprise at Current Prices

1994-95 to 2000-01 2000-01 to 2005-06

OAMEs

Rural -0.85 -1.30

Urban -2.75 -4.24

Combined -1.44 -2.38

NDMEs

Rural 4.85 -1.39

Urban -0.45 0.81

Combined 0.89 0.26

DMEs

Rural 0 3.82

Urban -0.65 6.13

Combined -0.41 5.79

All Enterprises

Rural -0.51 -0.63

Urban -1.07 2.05

Combined -0.78 1.18

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479, 480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

154

Table 3.17

Growth Rate of Capital Productivity in Unorganised Manufacturing Sector in

India by Type of Enterprise at Constant Prices (1993-94 prices)

1994-95 to 2000-01 2000-01 to 2005-06

OAMEs

Rural 0.32 -0.39

Urban -1.13 -3.54

Combined 0 -1.71

NDMEs

Rural 6.09 -0.21

Urban 1.07 1.44

Combined 2.14 1.16

DMEs

Rural 1.32 4.80

Urban 0.62 7.18

Combined 0.98 6.58

All Enterprises

Rural 1.68 0.93

Urban 0.20 3.20

Combined 0.95 2.11

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479, 480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

155

Table 3.18

Growth Rate of Capital Productivity in Unorganised Manufacturing Sector in

India by Industry Group at Current Prices

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 2.09 1.76 -3.29 -2.64 0.22 0.27

Textiles 0.18 -2.51 2.81 -0.96 1.62 -1.42

Wood &

Wood

Products

3.13 -4.09 -8.54 -2.02 -1.80 -2.61

Paper &

Paper

Products

-4.94 7.63 1.49 0.67 0.59 1.70

Leather &

Leather

Products

3.49 2.87 -6.23 3.97 -3.93 3.71

Chemicals

& Chemical

Products

-1.07 -0.34 2.36 6.38 1.32 2.31

Rubber &

Plastic

Products

3.86 -1.28 8.63 -0.59 7.94 -0.89

Non-

Metallic

Mineral

Products

-3.29 9.24 -1.69 -3.99 -3.16 4.77

Basic

Metals 19.8 -16.87 -10.91 8.75 -5.15 2.28

Metal

Products -2.18 -1.67 -0.73 10.82 -0.67 8.15

Machineries -4.95 -0.84 2.36 6.83 1.53 5.92

Transport

Equipments 15.84 -1.60 -8.23 1.79 -6.53 3.26

n.e.c. -0.61 2.69 -0.52 3.16 -0.47 3.10

All -0.51 -0.63 -1.07 2.05 -0.78 1.18

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479, 480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

156

Table 3.19

Growth Rate of Capital Productivity in Unorganised Manufacturing Sector in

India by Industry Group at Constant Prices (1993-94 prices)

Industry

Name

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Agro Foods 3.42 2.55 -2.01 -1.89 1.54 0.98

Textiles 5.36 0.50 8.35 2.26 7.07 1.54

Wood &

Wood

Products

4.60 3.29 -7.24 -1.03 -0.39 -1.84

Paper &

Paper

Products

-3.85 8.89 3.14 1.49 2.29 2.42

Leather &

Leather

Products

4.84 3.87 -4.95 5.06 -2.55 4.53

Chemicals &

Chemical

Products

-1.39 1.37 2.47 8.22 1.09 4.09

Rubber &

Plastic

Products

5.08 -0.58 9.96 0 9.47 0

Non-Metallic

Mineral

Products

-1.83 10.20 -0.23 -2.99 -1.73 5.43

Basic Metals 20.81 -20.30 -10.04 4.48 -3.86 -1.94

Metal

Products -1.16 -5.71 0.23 6.41 0.42 3.67

Machineries -2.18 0.43 5.25 8.02 4.65 6.75

Transport

Equipments 17.61 -0.64 -7.08 2.81 -4.91 3.98

n.e.c. 0.94 3.55 1.16 3.87 1.07 3.93

All 1.68 0.93 0.20 3.20 0.95 2.11

Source: Calculated from NSSO 1998 (Report No. 433), NSSO 2002 (Report No. 479, 480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

157

Table 3.20

State-wise Growth Rate of Capital Productivity in Unorganised Manufacturing

Sector in India at Current Prices

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 2.85 -2.02 2.33 -12.11 2.63 -6.58

Bihar 2.23 -1.27 -1.29 -0.99 1.05 -1.25

Gujarat 4.51 3.04 -1.99 2.19 -0.65 2.29

Haryana -5.72 1.96 -9.08 -4.07 -8.16 -2.91

Himachal

Pradesh -1.18 -4.45 -1.85 12.67 -1.91 3.90

Jammu &

Kashmir 10.68 0.86 -5.17 -5.94 3.42 -0.65

Karnataka 3.93 4.56 -5.27 1.59 -1.20 3.50

Kerala -3.21 -2.56 -0.78 -3.07 -2.38 -2.74

Madhya

Pradesh 0.74 1.46 -13.26 -1.89 -7.76 0.26

Maharashtra -1.61 -0.52 7.31 4.76 6.16 3.59

Orissa 2.25 3.86 -3.65 6.40 1.07 4.08

Punjab -3.84 -4.51 -5.17 1.61 -4.53 0

Rajasthan 2.92 4.05 -3.74 0.84 -0.43 2.02

Tamil Nadu -1.89 -0.55 -1.82 -2.44 -1.92 -1.79

Uttar Pradesh -1.78 2.18 -3.53 6.26 -2.54 4.16

West Bengal -3.57 5.09 -3.81 1.48 -3.44 -2.45

North Eastern

States 7.11 3.56 1.00 -0.88 5.15 2.41

Union

Territories 1.11 5.18 -1.49 8.31 -1.44 9.09

ALL -0.51 -0.63 -1.07 2.05 -0.78 1.18

Source: Calculated from NSSO 1998 (Report No. 434), NSSO 2002 (Report No. 479,480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

Note:

* North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi

* Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

158

Table 3.21

State-wise Growth Rate of Capital Productivity in Unorganised Manufacturing

Sector in India at Constant Prices (1993-94 prices)

Name of State

Rural Urban Combined

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

1994-95 to

2000-01

2000-01 to

2005-06

Andhra Pradesh 4.45 -1.27 3.92 -11.46 4.07 -5.69

Bihar 3.82 -0.49 0.25 -0.30 2.60 -0.32

Gujarat 6.19 3.75 -0.43 2.94 0.83 3.20

Haryana -4.18 2.63 -7.57 -3.65 -6.72 -1.85

Himachal

Pradesh 0 -3.65 -0.40 13.40 -0.52 4.63

Jammu &

Kashmir 12.40 1.70 -3.85 -5.04 5.03 0

Karnataka 5.56 5.50 -3.97 2.38 0.38 4.37

Kerala -1.92 -1.79 0.75 -2.30 -1.14 -1.98

Madhya

Pradesh 2.30 2.43 -11.88 -1.41 -6.23 0.92

Maharashtra 0 0.23 8.95 5.63 7.80 4.61

Orissa 3.76 4.85 -2.39 7.53 2.65 4.97

Punjab -2.47 -3.79 -3.90 2.90 -3.31 0.68

Rajasthan 4.28 4.84 -2.20 1.76 1.04 2.95

Tamil Nadu -0.60 0.49 -0.52 -1.76 -0.37 -0.92

Uttar Pradesh -0.17 2.92 -2.13 7.17 -1.21 5.10

West Bengal -2.23 -4.34 -2.36 2.35 -2.16 -1.51

North Eastern

States 8.57 4.47 2.40 0 6.67 3.18

Union

Territories 2.66 6.03 0 9.05 -0.28 10.08

ALL 1.68 0.93 0.20 3.20 0.95 2.11

Source: Calculated from NSSO 1998 (Report No. 434), NSSO 2002 (Report No. 479,480),

NSSO 2007 (Report No. 526) & NSSO 2008 (Report No. 525)

Note:

* North Eastern States include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Sikkim & Tripura

* Union Territories also include Goa & Delhi

* Jharkhand is clubbed with Bihar, Chhattisgarh with Madhya Pradesh & Uttaranchal with

Uttar Pradesh

159

Table 3.22

Nature of Problems faced by Percentage of Enterprises in Unorganised Manufacturing Sector in India by

Type of Enterprise (2005-06)

Type of

Enterprise

Problems

No s

pec

ific

Pro

ble

m

Non

-Avail

ab

ilit

y o

f E

lect

rici

ty

Con

nec

tion

Pow

er c

ut

Sh

ort

age

of

Cap

ital

Non

-Avail

ab

ilit

y o

f ra

w

mate

rials

Mark

etin

g o

f P

rod

uct

s

Loca

l p

rob

lem

Com

pet

itio

n f

rom

Larg

er U

nit

s

Lab

ou

r P

rob

lem

s

Fu

el P

rob

lem

Non

-Rec

over

y o

f S

ervic

e

Ch

arg

es

Lack

of

Infr

ast

ruct

ure

OAMEs 33.6 11.9 11.5 41.3 14.5 17.6 3.2 14.3 0.2 0.8 6.6 3.8

NDMEs 22.2 6.1 31.8 49.6 9.4 18.0 2.2 24.0 2.6 0.5 5.5 3.1

DMEs 28.2 4.6 32.8 37.9 10.9 16.4 1.5 23.1 5.4 0.9 3.6 3.1

All Enterprises 32.2 11.0 14.4 42.0 13.8 17.5 3.0 15.6 0.6 0.8 6.4 3.7

Source: Calculated from NSSO 2007 (Report No. 524)

159

160

Table 3.23

Sector-wise Analysis of Nature of Problems faced by Percentage of Enterprises

in Unorganised Manufacturing Sector in India (Rural+Urban) 2005-06

Industry Name

Problems

No

sp

ecif

ic P

rob

lem

No

n-A

vail

ab

ilit

y o

f E

lect

rici

ty

Co

nn

ecti

on

Po

wer

cu

t

Sh

ort

ag

e o

f C

ap

ita

l

No

n-A

vail

ab

ilit

y o

f ra

w m

ate

ria

ls

Ma

rket

ing o

f P

rod

uct

s

Lo

cal

pro

ble

m

Co

mp

etit

ion

fro

m L

arg

er U

nit

s

La

bou

r P

rob

lem

s

Fu

el P

rob

lem

No

n-R

eco

ver

y o

f S

erv

ice

Ch

arg

es

La

ck o

f In

fra

stru

ctu

re

Cotton-Ginning 31.2 3.4 31.9 42.1 5.1 15.6 0.4 4.6 1.2 0.7 1.0 0.8

Food products 24.2 15.8 22.6 48.3 12.3 21.7 3.3 16.9 0.7 2.4 6.8 4.5

Tobacco Products 51.6 17.5 3.6 22.2 20.6 8.7 3.8 4.3 0.1 0.0 6.6 1.7

Textiles 29.9 8.9 15.9 44.3 14.1 12.0 2.4 16.6 0.9 0.2 6.1 4.2

Wearing Apparel 34.5 5.9 18.1 40.7 5.7 12.1 1.9 21.3 0.3 0.0 7.0 2.8

Leather 23.3 3.1 17.9 56.6 11.3 21.6 1.7 22.8 0.3 0.0 5.3 5.3

Wood 23.3 15.4 6.2 52.4 22.8 30.3 4.1 11.1 0.3 0.2 5.7 6.1

Paper 63.1 1.7 8.5 24.5 5.3 14.1 0.4 10.3 0.7 0.0 1.8 3.0

Publishing & Printing 23.2 3.0 34.6 46.9 4.6 17.2 1.4 28.0 1.6 0.0 6.0 4.2

Coke & Petroleum 17.3 1.1 7.7 33.3 8.8 10.0 1.6 48.2 8.7 0.1 3.2 1.3

Chemicals 56.1 3.1 2.0 12.0 3.5 3.9 1.0 20.7 0.7 0.0 8.4 1.2

Rubber & Plastics 32.8 1.6 26.5 38.4 7.1 21.7 1.6 18.1 4.9 0.0 2.5 5.7

Non-Metallic 18.7 8.7 6.6 52.9 22.5 44.2 5.1 17.8 1.8 7.1 4.0 4.3

Basic Metals 22.3 5.5 37.2 57.0 26.9 20.0 4.7 31.7 2.4 0.7 1.3 4.3

Metal 21.0 8.3 24.0 59.3 10.8 21.8 2.9 18.3 1.7 0.8 7.8 3.7

Machinery 20.6 7.2 32.4 46.3 9.8 16.7 6.5 20.1 2.2 1.7 5.9 2.5

Office-Machinery 6.6 0.0 20.0 51.5 0.0 14.8 0.0 15.4 0.0 0.0 11.0 0.7

Electrical-Machinery 25.1 4.4 47.0 42.9 8.0 10.4 2.7 20.1 1.0 0.1 4.5 2.0

Comm. Equipment 13.2 0.0 35.4 50.5 9.2 45.1 0.7 29.7 5.6 0.0 1.8 4.4

Medical Instruments 26.0 0.0 30.2 45.3 8.4 30.2 0.8 31.6 0.3 0.0 5.3 5.8

Motor-Vehicles 16.7 4.8 51.8 66.0 2.0 9.6 2.4 45.8 1.6 0.4 4.6 1.4

Transport Equipment 11.6 2.2 52.7 50.8 13.1 15.8 0.8 9.4 0.7 0.8 3.5 2.1

Furniture 24.3 5.9 17.8 50.3 10.8 22.2 2.6 22.8 1.0 0.1 7.0 4.4

Recycling 23.3 0.0 38.5 59.8 0.6 9.2 9.2 27.8 1.2 2.7 4.2 0.0

All 32.2 11.0 14.4 42.0 13.8 17.5 3.0 15.6 0.6 0.8 6.4 3.7

Source: Calculated from NSSO 2007 (Report No. 524)

161

Table 3.24

Sector-wise Analysis of Nature of Problems faced by Percentage of Enterprises

in Unorganised Manufacturing Sector in India in Rural Areas (2005-06)

Industry Name

Problems

No

sp

ecif

ic P

rob

lem

No

n-A

vail

ab

ilit

y o

f E

lect

ric

ity

Co

nn

ecti

on

Po

wer

cu

t

Sh

ort

ag

e o

f C

ap

ita

l

No

n-A

vail

ab

ilit

y o

f ra

w m

ate

ria

ls

Ma

rket

ing o

f P

rod

uct

s

Lo

cal

pro

ble

m

Co

mp

etit

ion

fro

m L

arg

er U

nit

s

La

bou

r P

rob

lem

s

Fu

el P

rob

lem

No

n-R

eco

ver

y o

f S

erv

ice

Ch

arg

es

La

ck o

f In

fra

stru

ctu

re

Cotton-Ginning 3.9 2.7 28.9 30.9 3.8 15.4 0.0 4.5 0.8 1.0 1.3 1.0

Food products 23.1 18.3 21.4 49.2 13.5 22.7 3.6 15.6 0.6 2.7 7.8 5.1

Tobacco Products 49.1 20.7 3.8 24.7 20.8 10.2 3.1 4.5 0.1 0.0 7.3 1.6

Textiles 28.7 11.2 13.0 44.6 15.1 13.5 2.8 17.0 0.7 0.2 6.8 4.4

Wearing Apparel 34.5 8.2 15.1 40.1 7.0 13.3 2.1 21.0 0.1 0.1 8.8 2.7

Leather 13.2 4.9 7.6 66.2 33.1 25.0 0.4 21.3 0.3 0.0 13.6 2.3

Wood 22.8 16.6 5.0 52.9 23.1 31.2 4.2 10.2 0.1 0.2 5.8 6.3

Paper 80.2 1.5 3.8 15.3 3.7 8.6 0.0 0.7 0.1 0.0 0.6 4.1

Publishing & Printing 24.8 4.0 22.3 38.6 2.0 24.3 0.5 23.7 1.2 0.0 10.9 5.9

Coke & Petroleum 21.0 1.4 9.0 21.3 8.7 10.4 2.0 55.5 10.6 0.1 3.9 1.6

Chemicals 48.2 3.8 1.6 10.9 2.3 3.8 0.6 26.5 0.9 0.0 11.3 1.0

Rubber & Plastics 45.1 2.8 14.1 28.2 10.7 14.3 2.6 12.1 11.4 0.0 1.8 8.3

Non-Metallic 19.0 10.0 5.8 51.6 23.2 47.2 5.5 16.1 2.0 7.5 4.3 3.7

Basic Metals 16.0 9.4 23.5 75.8 54.2 15.3 1.7 42.8 5.1 1.8 0.4 7.7

Metal 21.8 11.4 15.3 63.5 13.1 24.4 3.2 13.9 0.7 0.8 9.3 4.4

Machinery 24.4 11.1 15.8 48.8 11.0 20.8 11.8 10.8 0.2 4.0 9.9 2.2

Office-Machinery 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Electrical-Machinery 28.2 6.7 43.5 42.5 7.9 6.8 3.1 17.6 0.5 0.0 6.4 1.1

Comm. Equipment 0.0 0.0 3.7 49.9 8.4 62.3 0.1 52.3 15.4 0.0 0.0 0.0

Medical Instruments 31.7 0.0 27.1 29.9 55.3 36.2 0.0 3.3 0.0 0.0 23.9 31.4

Motor-Vehicles 15.6 8.3 67.9 78.5 0.1 3.9 0.3 68.5 0.2 0.0 1.4 1.1

Transport Equipment 14.9 3.9 26.2 68.3 7.3 12.9 0.3 10.8 1.3 2.0 8.5 6.0

Furniture 18.3 9.9 16.9 54.5 14.6 27.0 3.4 19.0 0.4 0.0 10.4 7.1

Recycling 48.9 0.0 17.9 41.9 0.6 0.0 0.0 1.7 3.2 0.0 0.0 0.2

All 31.4 14.2 11.5 42.4 15.7 19.4 3.2 14.0 0.4 0.9 7.4 4.0

Source: Calculated from NSSO 2007 (Report No. 524)

162

Table 3.25

Sector-wise Analysis of Nature of Problems faced by Percentage of Enterprises

in Unorganised Manufacturing Sector in India in Urban Areas (2005-06)

Industry Name

Problems

No

sp

ecif

ic P

rob

lem

No

n-A

vail

ab

ilit

y o

f E

lect

rici

ty

Co

nn

ecti

on

Po

wer

cu

t

Sh

ort

ag

e o

f C

ap

ita

l

No

n-A

vail

ab

ilit

y o

f ra

w m

ate

ria

ls

Ma

rket

ing o

f P

rod

uct

s

Lo

cal

pro

ble

m

Co

mp

etit

ion

fro

m L

arg

er U

nit

s

La

bou

r P

rob

lem

s

Fu

el P

rob

lem

No

n-R

eco

ver

y o

f S

erv

ice

Ch

arg

es

La

ck o

f In

fra

stru

ctu

re

Cotton-Ginning 11.1 5.2 39.7 71.0 8.2 16.3 1.3 4.7 2.2 0.0 0.0 0.1

Food products 28.4 6.1 27.2 44.6 7.5 17.7 2.5 21.8 1.2 1.1 3.0 2.3

Tobacco Products 63.7 1.9 2.4 10.0 19.6 1.3 7.3 3.4 0.1 0.0 3.0 2.1

Textiles 32.6 4 22.2 43.8 11.8 8.8 1.6 15.6 1.5 0.2 4.7 3.8

Wearing Apparel 34.5 2.4 22.6 41.6 3.8 10.2 1.5 21.6 0.7 0.0 4.1 2.9

Leather 27 2.5 21.7 53.1 3.4 20.3 2.2 23.4 0.3 0.0 2.2 6.4

Wood 27.4 4.4 16.3 48.0 20.6 22.8 2.8 18.5 1.6 0.1 4.4 4.3

Paper 33.7 2.1 16.5 40.3 8.0 23.5 1.2 26.6 1.9 0.0 3.7 1.0

Publishing & Printing 22.9 2.9 36.8 48.4 5.0 15.9 1.6 28.7 1.6 0.0 5.1 3.9

Coke & Petroleum 0 0 1.8 89.2 9.1 7.8 0.1 14.4 0.0 0.0 0.0 0.2

Chemicals 75.7 1.4 3 14.6 6.7 4.1 1.9 6.4 0.2 0.0 1.3 1.6

Rubber & Plastics 26.2 1 33.1 43.9 5.2 25.6 1.0 21.3 1.4 0.0 2.8 4.4

Non-Metallic 17.2 2.6 10.5 59.2 18.8 29.4 2.9 26.5 1.0 5.3 2.5 7.0

Basic Metals 26.2 3 45.8 45.2 9.8 23.0 6.6 24.7 0.7 0.0 1.9 2.1

Metal 19.8 3.6 36.8 53.1 7.5 18.0 2.6 25.0 3.0 0.8 5.5 2.5

Machinery 18.2 4.7 43.1 44.6 9.0 14.1 3.2 26.1 3.5 0.1 3.4 2.8

Office-Machinery 0.3 0 21.4 55.0 0.0 15.8 0.0 16.5 0.0 0.0 11.8 0.7

Electrical-Machinery 22.4 2.3 50.2 43.2 8.1 13.6 2.3 22.4 1.5 0.2 2.8 2.8

Comm. Equipment 20.7 0 53.5 50.8 9.6 35.3 1.1 16.8 0.0 0.0 2.8 6.9

Medical Instruments 24.1 0 30.7 47.8 0.8 29.2 1.0 36.1 0.3 0.0 2.3 1.7

Motor- Vehicles 17.5 2.3 40.2 57.0 3.4 13.8 3.9 29.5 2.6 0.7 6.9 1.6

Transport Equipment 10.7 1.7 60.4 45.7 14.9 16.6 0.9 9.0 0.5 0.4 2.0 1.0

Furniture 29.5 2.5 18.6 46.7 7.5 18.0 1.9 26.0 1.5 0.1 4.0 2.1

Recycling 18.1 0 42.7 63.4 0.6 11.1 11.0 33.2 0.7 3.2 5.1 0.0

All 34.1 3.2 21.7 41.0 9.1 13.0 2.5 19.6 1.2 0.3 3.9 3.0

Source: Calculated from NSSO 2007 (Report No. 524)

163

Table 3.26

Correlation of Productivity with various variables (2000-01)

Variables Rural Urban Combined

OAMEs NDMEs DMEs All OAMEs NDMEs DMEs All OAMEs NDMEs DMEs All

Capital-

labour Ratio 0.827*** 0.291* 0.838*** 0.671*** 0.360** 0.292 0.524*** 0.721*** 0.686*** 0.350** 0.438*** 0.749***

Land per

enterprise 0.740*** 0.309* 0.994*** 0.808*** 0.338** 0.259 0.524*** 0.746*** 0.640*** 0.311* 0.523*** 0.744***

Loan per

enterprise 0.048 0.272 0.772*** 0.816*** -0.08 0.266 0.357** 0.653*** -0.062 0.196 0.218 0.739***

Share of

male

workers

0.246 0.249 -0.16 0.476*** 0.550*** 0.12 -0.018 0.526*** 0.527*** 0.084 -0.021 0.643***

Easy

availability

of power

-0.212 0.057 -0.315* -0.299* -0.366** 0.066 0.407** -0.099 -0.491*** 0.11 0.07 -0.165

Easy

availability

of

infrastructure

-0.065 -0.112 0.072 0.007 0.182 -0.32 0.345** 0.161 0.208 -0.379** -0.028 0.091

Easy

availability

of fuel

-0.222 0.106 0.085 -0.03 -0.744*** -0.33 0.224 -0.285* -0.195 -0.129 0.162 0.068

Easy

availability

of raw

materials

0.244 0.086 -0.109 0.215 -0.356** 0.105 0.354** 0.136 0.238 0.203 0.283 0.427**

Source: Calculated from NSSO 2002 (Report No. 478, 479)

163

164

Table 3.27

Correlation of Productivity with various variables (2005-06)

Variables Rural Urban Combined

OAMEs NDMEs DMEs All OAMEs NDMEs DMEs All OAMEs NDMEs DMEs All

Capital-labour

Ratio 0.045 0.095 0.509*** 0.542*** 0.353** 0.291* 0.690*** 0.365** 0.148 0.25 0.275 0.398**

Land per

enterprise 0.035 0.106 0.753*** 0.698*** 0.350** 0.274 0.610*** 0.465*** 0.17 0.217 0.396** 0.505***

Loan per

enterprise 0.095 0.125 0.115 0.432*** 0.043 0.505*** 0.591*** 0.446*** 0.146 0.285* 0.166 0.332*

Share of male

workers 0.511*** 0.217 -0.018 0.490*** 0.597*** 0.141 0.16 0.540*** 0.445*** 0.156 0.082 0.561***

Easy

availability of

power

-0.450*** -0.178 -0.525*** -0.586*** -0.436*** 0.035 0.350** -0.194 -0.599*** -0.305* -0.165 -0.443***

Easy

availability of

infrastructure

0.147 0.165 0.007 0.361** -0.097 0.097 0.154 0.178 0.095 0.278 -0.018 0.379**

Easy

availability of

fuel

0.09 0.281* 0.069 0.214 0.043 0.226 0.066 0.315 0.043 -0.348** 0.123 0.229

Easy

availability of

raw materials

0.154 0.360** 0.03 0.438*** -0.153 -0.154 0.198 0.149 0.148 0.26 0.094 0.476**

Education

status of

working owner

0.262 0.613*** 0.507** 0.558** 0.475** 0.331* 0.606*** 0.673*** 0.429** 0.494** 0.547*** 0.720***

Source Calculated from: NSSO 2007 (Report No. 524) & NSSO 2008 (Report No. 525)

16

4