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

Udai Bhan Singh () and Nripendra KIshore Mishra ()
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Udai Bhan Singh: Amity University Jaipur, Postal: Assistant Professor, ABS, Amity University, Jaipur, Amity House, 14, Gopalbari, Ajmer Road, Jaipur – 302001, Rajasthan, India
Nripendra KIshore Mishra: Department of Economics, Banaras Hindu University, Postal: Banaras Hindu University, Varanasi-221005, U.P., INDIA

Journal of Regional Development and Planning, 2016, vol. 5, issue 1, 35-54

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

Keywords: Informal Enterprises; Self-employed; Sub-contracting; Labour productivity (search for similar items in EconPapers)
JEL-codes: J23 J24 L33 M13 O17 (search for similar items in EconPapers)
Date: 2016
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