Grease establishment cogs to make economic wheel run well

According to the census, 58.5 million establishments are operating in India.

Published: 03rd September 2016 10:00 PM  |   Last Updated: 03rd September 2016 12:37 PM   |  A+A-

The Sixth Economic Census (SEC) published in 2016 is a robust data source, which can provide the number of establishments, persons employed, their geographical distribution, type of ownership and sectoral variations in our country. The report analyses the data collected during 2013-14. The SEC encompasses all establishments engaged in agricultural and non-agricultural activities, excluding crop production, plantation, public administration, defence and compulsory social security. For the first time, the data relating to handicrafts/handloom establishments was collected.

According to the census, 58.5 million establishments are operating in India. Of them, around 60 per cent are in rural areas and the rest in urban settings, but 78 per cent of the establishments were engaged in non-agricultural activities. It shows that even in rural areas, non-agricultural activities are picking up fast. The overall rate of growth of establishments is as high as 42 per cent (38 per cent in rural area and 47 per cent in urban). 

A state-wise comparison of establishments is thought-provoking. Five states—Uttar Pradesh (11.43 per cent), Maharashtra (10.49 per cent), West Bengal (10.1 per cent), Tamil Nadu (8.6 per cent), Andhra Pradesh (7.25 per cent)—together constitute about 50 per cent of the establishments. But the census doesn’t compare the establishment data with the population percentage. Uttar Pradesh with 16.5 per cent of the total population accounts for only 11 per cent of the establishments, but West Bengal with 7.5 per cent population has over 10 per cent of establishments. Bihar, which has the third largest population (8.5 per cent), accounts for only 3 per cent of establishments and 2.4 per cent employment. With 6.8 per cent of establishments and 7.32 per cent employment, Gujarat is just above its population (5 per cent). Kerala looks better with 2.7 per cent population, 5.7 per cent establishments and 5.2 per cent employment. Almost 90 per cent of the establishments are under private proprietorship. Private partnership is only 0.7 per cent and private company a meagre 0.33 per cent. There are barely any SHGs and cooperative establishments (0.41 per cent and 0.18 per cent).

The SEC provides us the X-ray picture of our economic activity. The potential of our establishments is a treasure chest, but the government is not keen on networking them through cooperatives or SHGs. The disconnect of small-scale establishments and the cooperative SHG network is evident from the negligible percentage of establishments falling in these categories.

The economic outcome of the millions of establishments hasn’t got any proper attention from income calculation pundits. By sheer number, it is comparable to the population of some European countries. The Jan Dhan Yojana might have intercepted with this huge number of economic players, but not yet made a reality check in selected districts and urban centres. The quantity of establishments and their fast growth may not be proper indicators of a vibrant economy because most of these establishments are not chosen, but fallen on the shoulders of the so-called proprietors due to their financial hardships.

The state has failed in networking and scaffolding them through economic and organisational stimulations, and the market captains have not streamlined them and chosen them as their downline across the country. The multitude of our enterprising proprietors, however, deserves a big salute.

Former member, Kerala State Planning Board

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