The government has always been promoting self-reliance through various schemes like MUDRA loans (Micro Units Development & Refinance Agency), and recently launched Athmanirbhar scheme to combat hardships posed by the pandemic. A major slice of households who claimed to be self-employed with their enterprises declined both in rural and urban India by the last quarter FY19.
The NSO survey reports self-employed as persons who operate their enterprises or are engaged independently in a profession or trade on their own or with a few partners. The quintessential attribute of the self- employed is that they have the autonomy to decide how, where, and when to produce. And also, economic independence concerning the choice of market, the scale of operation and finance for carrying out the necessary operations. The remuneration of the self-employed consists of a blend of two elements that is, a reward for their diligence and profit of their venture.
Figures and Statistics
A recent Periodic Labour Force Survey published by the National Statistical Office (NSO) indicates a segment of self-employed households descending in rural India from 52.2% in FY18 to 51.7% in FY19. And in urban India, it declined from 32.4% to 31.8% during the same period, although FY18 witnessed an increase in self-employed households in both rural and urban India and seemed promising.
In rural India, the slump is due to a drop in households depending on agriculture, from 37.8% in FY18 to 36.6% in FY19, while self-employed in non-agricultural activities increased from 14.3% to 15.1% during the same period. However, it is the decline in self-employed in urban India that is more bewildering. The NSO does not give a separate analysis for agriculture and non-agriculture households in urban India due to their limited dependence on agricultural activities. The significant decline for self-employed is disturbing, particularly in urban India, as it hints that small-scaled businesses have given up and have moved to become labor. The ex-self-employed are assumed to either join the formal workforce becoming regular wage earners or are joining the casual labor force.
The rural regions witnessed an increase in non-agricultural casual labor from 12.9% in FY18 to 13.4% in FY19. While in urban India, households dependent on casual labor lowered from 11.8% to 11% during the same period. The regular wage earners have increased both in rural (13.1%) and urban India (42.8%) by 0.4% points and 1.4% points respectively in FY19, indicating more formalization of the Indian economy.
