Informal manufacturing sector in India: a regional perspective

Abstract

In India the Informal manufacturing sector account for the 86% of the total work force. This work force is basically unskilled, mostly illiterate worker, who depend on such small works for their living. In short this segment caters to the needs of the most needy and vernal-able section of the population. After the 60 years of independence, when the country is experiencing a tremendous growth in all the aspects of the economy, Informal manufacturing sector should also taste the fruits of the success. But in reality the situation remained more or less the same as it was before the economic boom. The productivity of the sector has been a issue. There has not been any increase in the productivity of the sector. The number of firm and the number of workers has increased, even the increase in the number of firms has been very lower as compared to the increase in the number of the firms. This study has been hovering around the labour productivity of the firm and try to picture the problems of the sector in respect to productivity and general charteristics. The all India survey conducted by the National sample survey organization, govt. of india, is used to study the relationship between the economic growth vis a vis betterment of this sector. To analyze the industry structure and industry dynamics, the unit level data of the 62nd round of the NSS has been analyzed. Industry structure shows heterogeneity in the basic nature of the Informal sector. The problem of access to the credit came out to be the major problem and probably this is one of the reasons that maximum number of workers are not working in more productive/GVA per worker industries. The present study has been one with a view to look through the glass ceiling and investigate statistically the cause of this sector being so ignorant. this sector' contribution to the GDP is also a substantial amount and hence there is a need to provide them the share of the growth at least to the extent of their contribution to the National GDP.