|
Theme
of the week:
Distribution
of Enterprises and their Employees By Size Class of Employment*
1.
Introduction
Economic
Census is the complete count of all entrepreneurial units located within the
geographical boundaries of the country.
The main purpose of conducting this
exercise is to generate an updated frame of enterprises for detailed
follow-up surveys. Thus it provides essential data on the number of
enterprises and their distribution amongst different activities and across
regions and States. The information revealed by the Economic Census over
years makes it possible to discern certain trends in the growth process
which helps the planners and policy makers for the purpose of planning and
development and associated research specifically focussing on the
unorganised sectors of the economy.
2.
Enterprises and Establishments
Fifth
Economic Census of 2005 conducted in all states/Uts covering all economic
activities, both agricultural (except crop production and plantation) and
non-agricultural activities, has been covered. As per the UN System of
National Accounts 1993, an enterprise is an entrepreneurial unit,
which is engaged in production and/or distribution of goods and/or services
situated in one location or over different locations. An establishment
is an enterprise or part of an enterprise that is situated in a single
location. Economic Censuses cover all enterprises and their establishments
(excluding those involved in crop production and plantation), which are
engaged in production and /or distribution of goods and/or services other
than for the sole purpose of own consumption.
This
note, sixth in a series of notes, portrays the distribution of enterprises
and persons working therein by size class of employment.
3.Distribution
of All Enterprises and Their Employees By Size Class of Employment
The
location-wise distribution of all enterprises and persons working therein,
by size class of employment is presented in Table 1.
It
can be observed that a majority of the enterprises (39.76 million) has been
with less than 6 workers (that is 1-5 employment size), in percentage terms
it has been 95.1 per cent of total enterprises in 2005. This class of
enterprises has employed 64.8 million persons (64.2 per cent of total
employment) but possessed only an average of persons per enterprise with an
average 1.6 persons per enterprise in 2005.
As
explained earlier, the persons employed in the enterprises include wage
earners as well as persons working from owner households. It is this feature
that may have been responsible for a slight increase in the relative share
of enterprises falling under this ‘less than 6 workers’ category.
In
1990, there had been 23.4 million enterprises in less than 6 persons
employment category forming about 93.4 per cent of the total enterprises and
employing 39.2 million forming 54.5 per cent of the total persons employed.
The compounded annual average growth rate (CAGR) between 1990 and 2005 works
out to 3.6 per cent in case of enterprises and
3.4 per cent in the case of persons employed. The rural areas have
undoubtedly a higher proportion of such small enterprises with small size
employment. The share of enterprises in this category (1-5 persons employed)
in rural area has been 96.4 per cent of total rural enterprises and the
employment share has been 73 per cent in 005. In urban area the respective
numbers are 92.9 per cent and 54.9 per cent.
There
has been an addition of 5.7 lakh enterprises and 4.2 million in the
workforce in the employment size class 6-9
between 1990 and 2005. The respective CAGR works out to be 3.4 per
cent and 3.6 per cent. It can be seen from the Table 1 that it was during
the period 1998-2005, that this size class has witnessed a fairly fast rate
of growth, both in rural and urban areas. However employment per enterprise
both in rural and urban
locations as well as in all the census years, has remained stagnant at 7.0
under this middle size group, though 2005 witnessed a small rise of 0.2
percentge point as compared to earlier census years.
|
Table
1: Distribution of All Enterprises and Persons Usually Working
with them by Size Class of Employment
|
|
|
Size
Class of Employment
|
|
|
1-5
|
6-9
|
=>10
|
All
Size
|
1-5
|
6-9
|
=>10
|
All
Size
|
|
|
Number
of
Enterprise
( ' 000)
|
No
of Persons Usually Working ( ' 000)
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990
|
14072
|
359
|
291
|
14722
|
22496
|
2520
|
8280
|
33296
|
|
1998
|
16953
|
420
|
335
|
17708
|
27597
|
2929
|
9375
|
39901
|
|
2005
|
24625
|
635
|
276
|
25536
|
38003
|
4590
|
9477
|
52070
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990
|
9283
|
505
|
491
|
10279
|
16750
|
3560
|
18470
|
38780
|
|
1998
|
11564
|
574
|
504
|
12642
|
21213
|
4013
|
18172
|
43398
|
|
2005
|
15140
|
796
|
355
|
16291
|
26818
|
5744
|
16273
|
48835
|
|
Rural
Urban
|
|
1990
|
23355
|
864
|
782
|
25001
|
39246
|
6080
|
26750
|
72076
|
|
1998
|
28517
|
994
|
839
|
30350
|
48810
|
6942
|
27547
|
83299
|
|
2005
|
39765
|
1431
|
631
|
41827
|
64821
|
10334
|
25750
|
100905
|
|
CAGR
in %
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990-98
|
(2.4)
|
(2.0)
|
(1.8)
|
(2.3)
|
(2.6)
|
(1.9)
|
(1.6)
|
(2.3)
|
|
1998-05
|
(5.5)
|
(6.1)
|
(-2.7)
|
(5.4)
|
(4.7)
|
(6.6)
|
(0.2)
|
(3.9)
|
|
1990-05
|
(3.8)
|
(3.9)
|
(-0.4)
|
(3.7)
|
(3.6)
|
(4.1)
|
(0.9)
|
(3.0)
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990-98
|
(2.8)
|
(1.6)
|
(0.3)
|
(2.6)
|
(3.0)
|
(1.5)
|
(-0.2)
|
(1.4)
|
|
1998-05
|
(3.9)
|
(4.8)
|
(-4.9)
|
(3.7)
|
(3.4)
|
(5.3)
|
(-1.6)
|
(1.7)
|
|
1990-05
|
(3.3)
|
(3.1)
|
(-2.1)
|
(3.1)
|
(3.2)
|
(3.2)
|
(-0.8)
|
(1.5)
|
|
Rural
Urban
|
|
1990-98
|
(2.5)
|
(1.8)
|
(0.9)
|
(2.5)
|
(2.8)
|
(1.7)
|
(0.4)
|
(1.8)
|
|
1998-05
|
(4.9)
|
(5.3)
|
(-4.0)
|
(4.7)
|
(4.1)
|
(5.8)
|
(-1.0)
|
(2.8)
|
|
1990-05
|
(3.6)
|
(3.4)
|
(-1.4)
|
(3.5)
|
(3.4)
|
(3.6)
|
(-0.3)
|
(2.3)
|
|
Share
in %
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990
|
95.6
|
2.4
|
2.0
|
100.0
|
67.6
|
7.6
|
24.9
|
100.0
|
|
1998
|
95.7
|
2.4
|
1.9
|
100.0
|
69.2
|
7.3
|
23.5
|
100.0
|
|
2005
|
96.4
|
2.5
|
1.1
|
100.0
|
73.0
|
8.8
|
18.2
|
100.0
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990
|
90.3
|
4.9
|
4.8
|
100.0
|
43.2
|
9.2
|
47.6
|
100.0
|
|
1998
|
91.5
|
4.5
|
4.0
|
100.0
|
48.9
|
9.2
|
41.9
|
100.0
|
|
2005
|
92.9
|
4.9
|
2.2
|
100.0
|
54.9
|
11.8
|
33.3
|
100.0
|
|
Rural+Urban
|
|
1990
|
93.4
|
3.5
|
3.1
|
100.0
|
54.5
|
8.4
|
37.1
|
100.0
|
|
1998
|
94.0
|
3.3
|
2.8
|
100.0
|
58.6
|
8.3
|
33.1
|
100.0
|
|
2005
|
95.1
|
3.4
|
1.5
|
100.0
|
64.2
|
10.2
|
25.5
|
100.0
|
|
Rate
of Employment (Employee per
Enterprise
)
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990
|
|
|
|
|
1.6
|
7.0
|
28.5
|
2.3
|
|
1998
|
|
|
|
|
1.6
|
7.0
|
28.0
|
2.3
|
|
2005
|
|
|
|
|
1.5
|
7.2
|
34.3
|
2.0
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990
|
|
|
|
|
1.8
|
7.0
|
37.6
|
3.8
|
|
1998
|
|
|
|
|
1.8
|
7.0
|
36.1
|
3.4
|
|
2005
|
|
|
|
|
1.8
|
7.2
|
45.8
|
3.0
|
|
Rural+Urban
|
|
1990
|
|
|
|
|
1.7
|
7.0
|
34.2
|
2.9
|
|
1998
|
|
|
|
|
1.7
|
7.0
|
32.8
|
2.7
|
|
2005
|
|
|
|
|
1.6
|
7.2
|
40.8
|
2.4
|
|
Source:
CSO (2008), Economic Census 2005, All India Report, and earlier
issues
|
A
distinct result that emerges from the size class distribution of enterprises
is that the proportions of enterprises as well as employed persons have
consistently declined in the size class of 10 or more persons.
Interestingly, this reduction he size class 10 or more persons working has
been witnessed nont only in terms of proportions but also in terms of the
number of enterprises and actual size of employment. While the number of
enterprises has declined by 1,51,000 to 6,31,000 between 1990 and 2005,there
has occurred a fall of about one
million workers in this ’10 or more workers’ category. In this respect,
workers in the enterprises situated in rural areas has been better of as
compared to their counterparts in urban areas. In rural areas, the number of
enterprises has witnessed a fall from 291 thousand to 276 thousand, a
decline of 15,000 enterprises in this size groups category, but in
employment there has been actually an increase from 8.3 million in 1990 to
9.5 million in 2005 – a 1.2 million addition to the work force in rural
areas. As against this in urban areas both the enterprise number in this
category as well as employment has registered a decline. Still the rate of
employment or employment per enterprise has been better in urban areas than
that in rural areas.
4.Distribution
of Own-Account Enterprises and Persons working therein By Size Class of
Employment
Distribution
of own-account enterprises and persons usually working therein by size class
of employment has been depicted in Table 2. It can be observed that 97.5 per
cent of the enterprises and about 97 per cent of the workers had been
included in size class of less than 6 workers. The CAGR between 1990 and
2005 works out to be 2.9 per cent and in employment it is only 2.2 per cent.
This happened mainly because the period 1998 and 2005 has registered almost
no growth in employment in urban areas
Own-account
enterprises (OAEs) in the category that employed
6 to 9 workers
declined from 1.1 lakh enterprises in 1990 to 1.0 lakh
enterprises in 2005 with an annual average decline of 0.5 per cent.
Employment in this category came down from 7.3 lakh persons to 7.0 lakh
persons during the period. However in rural areas, the number of enterprises
has witnessed an increase from 69,300 enterprises in 1990 to 71,600
enterprises in 2005; employing 4.7 lakh persons in 1990 which rose to 5.0
lakh persons in
|
Table
2 : Distribution of Own Account Enterprises and Persons Usually
Working therein by Size Class of Emp.
|
|
Size
class
|
1-5
|
6-9
|
=>10
|
All
Size
|
1-5
|
6-9
|
=>10
|
All
Size
|
|
|
Number
of
Enterprise
( ' 00)
|
|
Number
of Persons Usually Working ( ' 00)
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990
|
112336
|
693
|
144
|
113173
|
161513
|
4677
|
2240
|
168430
|
|
1998
|
134919
|
779
|
309
|
136007
|
196069
|
5243
|
6615
|
207927
|
|
2005
|
180225
|
716
|
161
|
181102
|
239549
|
4991
|
2725
|
247265
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990
|
63159
|
389
|
108
|
63656
|
86946
|
2646
|
1374
|
90966
|
|
1998
|
77107
|
450
|
193
|
77750
|
106448
|
3060
|
4945
|
114453
|
|
2005
|
87971
|
286
|
51
|
88308
|
107140
|
2005
|
913
|
110058
|
|
Rural+Urban
|
|
|
|
|
|
|
|
|
1990
|
175495
|
1082
|
252
|
176829
|
248459
|
7323
|
3614
|
259396
|
|
1998
|
212026
|
1229
|
502
|
213757
|
302517
|
8303
|
11560
|
322380
|
|
2005
|
268196
|
1002
|
212
|
269410
|
346689
|
6996
|
3638
|
357323
|
|
CAGR
in %
|
|
|
|
|
|
|
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990-98
|
(2.3)
|
(1.5)
|
(10.0)
|
(2.3)
|
(2.5)
|
(1.4)
|
(14.5)
|
(2.7)
|
|
1998-05
|
(4.2)
|
(-1.2)
|
(-8.9)
|
(4.2)
|
(2.9)
|
(-0.7)
|
(-11.9)
|
(2.5)
|
|
1990-05
|
(3.2)
|
(0.2)
|
(0.7)
|
(3.2)
|
(2.7)
|
(0.4)
|
(1.3)
|
(2.6)
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990-98
|
(2.5)
|
(1.8)
|
(7.5)
|
(2.5)
|
(2.6)
|
(1.8)
|
(17.4)
|
(2.9)
|
|
1998-05
|
(1.9)
|
(-6.3)
|
(-17.3)
|
(1.8)
|
(0.1)
|
(-5.9)
|
(-21.4)
|
(-0.6)
|
|
1990-05
|
(2.2)
|
(-2.0)
|
(-4.9)
|
(2.2)
|
(1.4)
|
(-1.8)
|
(-2.7)
|
(1.3)
|
|
Rural+Urban
|
|
|
|
|
|
|
|
|
1990-98
|
(2.4)
|
(1.6)
|
(9.0)
|
(2.4)
|
(2.5)
|
(1.6)
|
(15.6)
|
(2.8)
|
|
1998-05
|
(3.4)
|
(-2.9)
|
(-11.6)
|
(3.4)
|
(2.0)
|
(-2.4)
|
(-15.2)
|
(1.5)
|
|
1990-05
|
(2.9)
|
(-0.5)
|
(-1.1)
|
(2.8)
|
(2.2)
|
(-0.3)
|
(0.0)
|
(2.2)
|
|
Share
in %
|
|
|
|
|
|
|
|
|
|
Rural
|
|
|
|
|
|
|
|
|
|
1990
|
99.3
|
0.6
|
0.1
|
100.0
|
95.9
|
2.8
|
1.3
|
100.0
|
|
1998
|
99.2
|
0.6
|
0.2
|
100.0
|
94.3
|
2.5
|
3.2
|
100.0
|
|
2005
|
99.5
|
0.4
|
0.1
|
100.0
|
96.9
|
2.0
|
1.1
|
100.0
|
|
Urban
|
|
|
|
|
|
|
|
|
|
1990
|
99.2
|
0.6
|
0.2
|
100.0
|
95.6
|
2.9
|
1.5
|
100.0
|
|
1998
|
99.2
|
0.6
|
0.2
|
100.0
|
93.0
|
2.7
|
4.3
|
100.0
|
|
2005
|
99.6
|
0.3
|
0.1
|
100.0
|
| |