Growth Dynamics of the Informal Manufacturing Sector in Assam: A Comparison to the National Level

Transcription

1 104 Growth Dynamics of the Informal Manufacturing Sector in Assam: A Comparison to the National Level Ashima Majumdar, Research Scholar, Indian Institute of Technology, Guwahati, India Prof. Saundarjya Borbora, Indian Institute of Technology, Guwahati, India I.INTRODUCTION Informal sector 1 have proved itself to be one of the the most vibrating and dynamic sector in the developing countries like India, especially through its contribution towards the growth in the number of enterprises and employment. In fact the Informal manufacturing sector 2 summarizes the entire manufacturing sector in India, where more than 85% of total manufacturing employment and almost 98% of total manufacturing enterprises are lying (Sahu 2008). The unchanging dominance of the informal manufacturing sector in the post reform period have nullified the fear as expressed by many (Saxena 2008), that they will be wiped off in the strong waves of liberalization. Against this, recent studies have shown that the informal sector is flourishing in the era of liberalisation (Singh 2007, Jayalakshmi 2008). The importance of small enterprises for a country like India is well laid in the budget document for the fiscal year , where the emphasis is given on maintaining the sustainable growth rate for the economy. This is crucial for bringing down the poverty level, which is still very high. Provision of employment opportunities is a must and the foremost task to bring down poverty level. However with the withdrawal of the public sector from many areas along with the continuing policies of disinvestment, employment in the public sector has been experiencing a trend of deceleration (Choubey 2005, Nair 2008, Sen and Dasgupta 2009). Employment expansion from the organized private sector is also unexpected as they are shedding off excess labour to minimize cost and are using new technologies which are essential to maintain efficiency and competitiveness in the rapidly changing economic environment. Informal sector which is considered as a typical urban phenomena, have come out as the major employment provider for those thrown out of employment form the organized/formal sector 3 and also for the new migrants from the rural areas to the cities. Keeping in view the growing importance of the informal sector in Indian economy, various studies at the disaggregated levels of states and industries have been carried out by researchers and policy makers focusing on its various aspects such as growth dynamics, productivity, its linkages to the formal sector etc. (Rani and Unni 2003, Pais 2006, Lalitha 2002, Rani and Galab 2001, Shaw 1990, Singh and Jain 2006, Upadhyay 2007, Mukherjee 2003, Natarajan 2007 etc). Interestingly most of such studies have ignored the discussion on the informal sector of the north eastern part of India. Informal manufacturing sector can particularly play an important role in this industrially less developed part of the country, by bringing a wave of informal industrialisation. The present paper is an attempt to explore the growth dynamics of the informal manufacturing sector in Assam, the gateway to the entire north east and the most developed among the north eastern states. Assam can also be termed as mini India where people from different states (and also from within the north eastern states) do migrate in search of some productive employment opportunities. This makes the state vulnerable to the emergence of different kinds of informal activities by these migrants. An understanding of the functioning these urban informal sector of the state is the need of the hour to assess its growth potentialities in the near future. This paper is an attempt in this direction. The paper is divided in to five sections. Section II discusses the methodological part, section III discusses the growth of the various indicators at the state and the national level, section IV tires to explore the interrelationship among these indicators and section V summarises the main findings of the paper. II. Methodology The paper has made use of data on enterprise and employment as provided by National Sample Survey Organisation (NSSO) on informal manufacturing sector for three points of time 1994-

2 105 95, and NSSO is selected as the only major secondary source of information as this is the only agency to provide data on various dimensions of the informal manufacturing sector of India at regular interval. Out of a number of indicators of growth dynamics 14 are considered to serve the purpose of the study, keeping in view availability of the data at the state level, in all the three rounds under consideration. These are I)Number of enterprises (TEnt), II)Growth in the number of enterprises, III )Share of the urban IMS of the state at the national level, IV)Total employment ((TE), V)Growth in the number of total employment, VI)Share of the employment in the urban IMS of the state at the national level, VII)Full time workers, VIII)Part time workers, IX) Employment per enterprise(epe), X)Fixed Assets owned per enterprise (FA), Xi)Gross Value Added per enterprise (GVAPent), XIII) GVA per worker ( GVAPW), and XIV)Fixed assets owned per worker (GVAPFA). The gender aspect of employment is also analysed, which helps to discuss the changing position of women workers in the IMS. This is an important issue as the wave of feminisation is on at the all India level; in the post reform period (Eapen 2001, Unni et. al. 1999, Dewan 1999). The growth rates of various indicators are compound annual growth rate calculated as r= {(end value/begin value) ^ (1/no. of intervening period)- 1}*100 The value items are expressed in prices. GVA are deflated by wholesale price index (WPI) of the manufactured goods and fixed assets are deflated by the WPI of the machinery and machine equipment. The interrelationship among these indicators for all the three types 4 of informal manufacturing enterprises is discussed with the construction of the correlation coefficients 5 matrix. The entire period of analysis from to is sub divided in to two and are labeled as early reform period ( to ) and the later reform period ( to ). III. Growth Profile of the urban IMS of Assam in comparison to the national level A) Growth of enterprises in the urban IMS of Assam: Table1 shows the estimated number of the urban IMS enterprises in the state and compares it with the urban IMS of India. It is seen that in all the three periods under study the OAMEs dominate the IMS of the state with the majority of enterprises coming under it. Next stands the NDMEs and finally the DMEs. This is in line with the national trend. However the share of OAMEs in the urban IMS of the state has consistently been lower than the national average. The same is the case with the highest form of the IMS i.e. the DMEs. But the middle category of IMS i.e. NDMEs shows a strong presence in the urban IMS of the state with its share constantly been higher than the national average in all the three periods under study. The urban IMS of the state marks a positive growth in the early reform period from 1994 to 2000 whereas the period from is associated with a negative growth (Table 2). This follows the national trend. However a closer look into the growth of the various segments of the IMS shows that during , NDMEs at the national level mark a negative growth (-0.9), whereas the same segment registered a positive growth (0.3) in the state urban IMS. More interestingly DMEs, the highest segment of the IMS, shows spectacular growth (6.9) in the urban IMS of the state as against a smaller growth of 0.5% at the national level. The positive growth of the higher segments of the IMS can be considered as a sign of development for the urban IMS of the state. Table 1: Estimated number of UIMS enterprises ( 00) by enterprise type in urban Assam OAME NDME DME ALL IMS (56.5) 126 (38.9) 15 (4.5) 323 (100) (67.7) 9320 (23.2) 3602 (8.9) (100) (61.3) 133 (35.1) 14 (3.7) 380 (100) (70.9) (21.3) 4002 (7.9) (100) (58) 136 (36) 21 (5.5) 377 (100) (70.8) (20.7) 4133 (8.3) (100)

3 106 Source: NSSO 51 st, 56 th and 62 nd rounds, indiastat.com. Table 2: Growth in the number of IMS enterprises: Assam and All India compared OAME NDME DME ALL IMS to to to Source: Author s calculation based on table 1. B) Share of the urban IMS of the state at the national level: Table 3 and 4 shows the share of the urban IMS of the state at the all India level. The share of the urban IMS of the state as a whole has declined marginally at the all India level during the study period (a decline from 0.8% in to 0.76% in ). While the share of the OAMEs have declined continuously, the urban NDMEs of the state show constant share in and in , except a marginal decline to 1.2% in Urban DMEs of the state experienced a fall in their share during , but then showed an increase in share which surpassed the level. It is thus found that during the period from to the urban IMS of the state have registered a falling share of -7.3% at the national level. The highest fall was experienced by DMEs (-15.9%) and lowest fall by the OAMEs (-3.6%). Against this the period from to have marked an increase in the share (2.1%) of the urban IMS of the state at the national level. The highest share are enjoyed by the DMEs (45.2%), followed by the NDMEs (7.9%). The falling shares of the OAMEs continued during this period also and are responsible for the small percentage share of the overall IMS of the state at the all India level. Table 3: share of the UIMS enterprises of Assam in the UIMS of India (%) OAME NDME DME Total Source: Author s calculation based on table 1 Table 4: Percent change in share Source: same as table 2 OAME NDME DME Total to to to

4 107 C) Total employment in the IMS sector of the state: The analysis of the employment situation of the urban IMS of the state brings into light the huge employment potentialities of this sector as compared to the all India level. Table 5 and 6 discuss the situation of employment and its growth in the urban IMS of the state. It is found that the NDMEs are the major employment provider of the urban IMS of the state which is against the national trend, where the OAMEs are providing more employment. Employment concentration is lowest in DMEs of the state. However the changing employment situation in the urban IMS of the state shows that in the period from to , growth of employment is the highest in OAMEs, which is even higher than the all India level, followed by the NDMEs and DMEs. In the later period from to spectacular employment growth took place in the DMEs (14.7) as against a growth of 2% at the national level. Because of this fabulous growth of employment in the DMEs, the urban IMS of the state as a whole, could register a positive growth of employment during this period whereas the same period observed a negative growth (-0.1%) of employment at the all India level. Considering the entire period from to it is found that the growth of employment in the urban IMS of the state (2.1%) is above the national level (1.6%). Table 5: Estimated employment (in 00) in urban IMS of Assam OAME NDME DME ALL IMS (36.4) 393 (50.2) 105 (13.4) 783 (100) (43.5) (27.6) (28.9) (100) (40.8) 415 (46.9) 108 (12.2) 884 (100) (100) (45.1) (27.7) (27.1) (34.12) 424 (43.7) 215 (22.1) 970 (100) (43.6) (26.1) Source: NSSO 51 st, 56 th and 62 nd rounds Table 6: Growth in employment in urban IMS of Assam (in %) (30.2) (100) OAME NDME DME ALL IMS to to to Source: Author s calculation based on table 5 D) Share of IMS employment of Assam at the national level Table 7 and 8 discuss the share of employment in the urban IMS of the state and its changing structure at the national level. The employment shares of the urban IMS of the state have shown an increase during the study period (from 0.70% in to 0.74% in ). Among the three

5 108 categories of the IMS, the urban NDMEs of the state have highest employment share at the national level and the share of DMEs were found to be the lowest in all the three periods under study. Over the years, however the pattern of employment have changed; where the share of the OAMEs and NDMEs are declining and that of the DMEs are increasing. The early reform period was a period of falling employment share (-4.5%) of the urban IMS of the state. Except OAMEs (3.19%), both the NDMEs and the DMEs recorded falling employment share at the national level during this Table 7: Share of the IMS employment in Assam at period. The later reform period was associated with the positive employment share of the IMS of the region (10.6%). This is mainly triggered by the positive growth in the shares of the NDMEs (9.18%) and the DMEs (80.25%). It is because of the spectacular growth of employment in the DMEs of the urban IMs of the state that the employment share of the state stood at a positive figure of 5.6%, in spite of the fact that the other two categories of the IMS showed a negative growth in employment share during the entire study period. the national level. OAME NDME DME Total Source: same as table 6 Table 8: change in the Share of the IMS employment of Assam at the national level(in %). OAME NDME DME Total to to to Source: same as table 6 E ) Gender wise distribution of employment in the IMS of Assam: Table 9 and 10 brings out the gender wise distribution of employment in the urban IMS of Assam and compares it to the All India level. It is found that the female employment is occupying an increasing share in the total urban IMS employment and the corresponding male employment has experienced a fall in its share. This is in line with the all India trend. The female workers of the state occupy a smaller percentage share in total employment as compared to female workers at the all India level, whereas the male employment shows a higher percentage share. However the changing share of employment shows that the female employment in the state are enjoying a higher percentage share in both the early and later reform period when compared to the changing share of female employment at the national level. For the entire period under study the percentage change in the share of female employment in the state (60.93) has been found to be higher than the all India average (55.42). At the same time the falling percentage share of the male employment in the state (-8.94) has been lower than the all India level (-11.75). This is an indication of the fact that the share of both the male and the female employment in the IMS of the state are increasing as compared to the national level and the IMS of the region is growing.

6 109 Table 9: Gender distribution of employment in urban IMS of Assam and India Year TE FE ME % share of FE in TE % share of ME in TE Source: NSSO reports no. 434, 477, 524 and indiastat.com Note: TE: Total Employment, FE: Female Employment, ME: Male Employment Table 10: Changing share of employment by gender in urban IMS of Assam and India % change in the share of FE in TE % change in the share of ME in TE to to to to to to Source: Author s calculation based on table 9 F) Employment by Nature By nature employment is classified into part time 6 and full time 7. Study of employment by nature helps in estimating the magnitude of workforce fully dependent on earning from the IMS. This is discussed with Table 11 and 12. More than 80% of workers are found to be engaged as full time workers (FTW) both at the state as well as at the national level in all the periods under study. However a trend of falling share of FTW is observed with a rising share of the part time workers (PTW). At the national level a higher percentage of FTW is observed than at the state level, whereas the percentage of PTW is higher at the state level. Dominance of male employment over the female employment is observed both for the category of PTW as well as the FTW. Gender wise distribution of employment shows that the share of both the full time male workers (FTMW) and full time female workers (FTFW) have decreased in and than increased in Part time male workers (PTMW) shows continuous declining share over the study period, whereas the part time female workers (PTFW) shows an increasing share during the same period. A discussion on the growth of employment by nature and gender revealed the fact that growth rate of the FTW as well as PTW was higher during early reform period as compared to the later reform period, both at the regional and national level. The FTW suffered a negative growth during the later period, which causes the overall growth of the FTW to be lower than the regional level. The growth of the PTW at the all India is higher than the regional growth rate of the TW for the entire

7 110 study period. It is also found that at the regional level FTFW registered a GR which is higher than the GR of FTFW at the national level. The GR is also much higher than the GR of the FTMW both at the state and at the national level. This high growth rate puts FTFW in the category of highest GR during the entire study period, despite experiencing a negative growth during to In the category of PTW, PTFW of the state is growing at a slower rate than their counterpart at the national level, but is higher than the GR of PTMW both at the national and at the regional level. In the later reform period, the GR of PTFW of the state surpassed the GR of the remaining categories of the PTW both at the national as well as regional level. Thus both the FTFW and The PTFW of the state are experiencing higher GR than the male counterpart both at the state and at the country level Table 11: Estimated employment by nature and gender in Assam and India (89.7) (83) 647 (84.5) FT PT ALL(PT+FT) M F A M F A M F 72 (10.2) (16.3) 118 (15.4) 702 ( 89.7) (95.2) 765 (86.5) 52 (65) 3101 (58.9) 75 (62.5) 28 (4.1) 2159 (2.3) 44 (6.1) 80 (10.23) 5260 (4.7) 120 (13.5) 682 (87.21) (82.5) 722 (81.7) 100 (12.78) 19388(17.5) 162 (18.32) (79.9) (20.1) (90.4) 4174 (33.3) 8338 (8.4) (9.5) (75.4) (24.5) (86.9) 107 (13.1) 818 (84.3) 59 (38.8) 92 (11.9) 152 (15.6) 770 (79.4) 199 (20.5) (78.4) (21.6) (87.8) 5000 (31.7) (11.3) Source: Author s calculation based on NSSO report no. 434, 479 and indiastat.com Note: figures in the parentheses shows the percentages (12.1) (72.7) (27.3) Table 12: Growth of employment by nature and gender in Assam FT PT ALL(PT+FT) M F A M F A M F ALL (PT+FT) to to to Source: Author s calculation based on table 11. Note: M: male; F: female; PT: part time; FT: full time G) Employment per enterprise:

8 111 Employment per enterprise is given by the employment enterprise ratio. Table 13 and 14 gives the employment enterprise ratio and its growth in the study period. It is found that per enterprise employment grows positively in the IMS of Assam whereas at the all India level the ratio shows a negative growth. This is mainly triggered by the high and positive growth in the employment enterprise ratio in the later period of reform in Assam as compared to the national level. Looking into the employment enterprise ratios for the various segments of IMS revealed the fact that NDMEs; both at the national as well as at the regional level shows little or no growth in employment per enterprises, whereas the DMEs shows maximum positive growth. For the OAMEs the employment per enterprise shows a negative growth both for Assam and India. Thus the higher segments of IMS are attracting more and more persons over the years. Table 13: Employment enterprise ratio in the IMS of the state Source: Author s calculation based on table 1 and 5. Table 14: Growth in employment enterprise ratio in IMS of Assam (in%) to to to to to to Source: authors calculation based on table 13 H) Fixed assets owned per enterprise: It is found that over the years the fixed capital used by the urban segment of IMS has been higher than their rural counterpart, in each of OAMEs, NDMEs and DMEs. This may have far reaching implication on productivity levels of the urban IMS. An analysis of the fixed assets 8 used per enterprise and their growth is presented in tables 15 and 16. As expected, the use of fixed capital per enterprise is found to be the lowest in OAMEs and highest in DMEs both at the state as well as at the national level. Fixed capital used by an IMS unit at the national level is almost 3 times higher than the fixed capital used by the IMS unit of the state in The gap narrowed down in and where an IMS unit at the national level used 2.7 and 1.8 times more fixed capital than the IMS unit of the state, respectively. Much progress has been made by the DMEs in arranging fixed capital for

9 112 them during the study period, as they begin with a gap of around 5.6 times and ended with a gap of 1.7 times. Growth of fixed capital in the DMEs of the state too showed a significant growth both in the early and later period of reform, which was higher than the growth rate of their counterpart at the national level. During the OAMEs of the state recorded higher positive growth of per enterprise use of fixed capital than the OAMEs of the national level, whereas the growth of fixed capital in the NDMEs during this period falls slightly below the national level. Later period of reform observed higher growth rate of per enterprise fixed capital for both OAMEs and the NDMEs. A slowdown in the growth of per enterprise use of fixed capital is observed in the later period of the reform both at the national and at the state level. This slowdown is mainly caused by the falling employment and enterprise growth in the later period of the study. Table 15: Fixed assets owned by IMS of Assam and India (in `) Source: Same as table 1 Table 16: Growth in fixed assets in the IMS of Assam and India (in%) to to to to to to I)

10 113 Gross Value Added per Enterprise (GVA per enterprise): GVA per enterprise 9 is an indicator of the productivity of an enterprise. In Table 19 and 20 GVA per enterprise and its growth during the study period; separately for the pre and post reform period are presented. A direct relation is found to exist between the size of an enterprise and its productivity. Productivity in the DMEs are found higher than the OAMEs and NDMEs both at the national and the state level. Also the growth in per enterprise productivity is highest in DMEs than the OAMEs and the NDMEs both for Assam and India. The OAMEs of the state are found to be more productive than the OAMEs at the all India level whereas the state NDMEs and DMEs are proved to be less productive. The growth in the productivity per enterprise of the IMS as a whole is found to be higher in Assam than All India level in both early and later reform period. The reason is the higher growth in productivity in all the IMS segments of the state (OAME, NDME, and DME), except a slower growth in productivity in the state NDMEs in the early reform period. It is also to be noted that the later period of the reform observed a higher growth in productivity in the IMS sector both at the state and the national level, which is a pointer to the fact that the IMS sector could stand well in the ongoing strong liberalization waves. Table 19: GVA per enterprise in the IMS of Assam and India Source: NSSO 51 st, 56 th and 62 nd rounds, indiastat.com. Table 20: Growth in GVA per enterprise in the IMS of Assam and India (in %) to to to to to to Source: Table 19 J) Gross Value Added per worker (GVA per worker) : GVA per worker 10 measures the labour productivity. Table 21 and 22 analyse and compare the labour productivity levels in Assam

11 114 with that of India for all the three segments of IMS. Labour productivity in OAMEs were found to be the lowest both at the national and the state level and highest in the DMEs, except for the period where the state NDMEs recorded marginally higher labour productivity than the state DMEs. Labour productivity in the higher categories of the IMS, i.e., the NDMEs and DMEs are found to be higher than the labour productivity of the IMS As a whole in all the periods, both at the state and at the all India level. Labour productivity in the entire IMS of the state was found to be lower than the national level during the study period, which is true for the all the individual IMS segment. However the growth in labour productivity in the IMS of the state is found to be higher than the IMS of India, both in the early and later reform periods. More specifically higher growth in labour productivity is observed in the OAMEs of the state as compared to all India OAMEs. Another important point that needs attention is that the labour productivity growth is much faster in the later reform period than the early reform period. Fastest productivity growth is observed in the DMEs followed by the NDMEs and OAMEs. Table 21: GVA per worker in Assam and India (in `) (3) (2) (1) (3) (2) (1) (3) (2) (1) (3) (1) (2) (3) (2) (1) (3) (2) (1) Source:NSSO 51 st, 56 th and 62 nd rounds, indiastat.com. Note: figures in the parentheses shows the ranks. Table 22: Growth in GVA per worker in Assam and India (in %) to to to to to to Source: Table 21 K) GVA per unit of fixed capital : GVA per unit of fixed capital 11 is a measurement of the capital productivity in an IMS. Table 23 and 24 shows and compares the capital productivity in Assam with that of all India level. Capital is found to be more productive in the state IMS than national IMS. All the individual IMS segments are found to show higher capital productivity than their national counterpart for all the time periods under study. During the period to , capital productivity shows negative growth in the IMS of the state and the country as well. It is only in the later period i.e.

12 to , a positive growth in capital productivity is witnessed. It is interesting to note that though the capital productivity in the IMS of the state is higher than the all India average, the growth in the capital productivity in the state IMS is slower than the nation. Table 23: Gross Value Added per unit of Fixed Capital in Assam and India (in `) (1) (3) (2) (2) (3) (1) (3) (2) (1) (1) (2) (1) (2) (3) (3) (1) (2) Source: NSSO 51 st, 56 th and 62 nd rounds, indiastat.com. Note: figures in the parentheses shows the ranks Table 24: Growth in GVA per unit of fixed capital in Assam and India to to to to to to Source: Table 23 IV) Interrelationship among the indicators of growth: The exercise of correlation coefficient is carried out separately for the OAMEs, NDMEs and DMEs. However the analysis could not be carried out at the disaggregated levels of industries, as the data were not available for Assam; in the surveys considered for the study. Table 25 shows interrelationship between the growth indicators of the OAMEs of the state. The correlation exercise shows that number of total enterprises (Tent) bears positive correlation with no. of total employment (TE), fixed capital used per enterprise (FC), gross value added per enterprise (GVAPent) and gross value added per worker (GVAPW). This implies an increase in total number of OAMEs results in the increase in total employment, fixed capital used per unit, GVA Pent and GVAPW and vice versa. At the same time Tent is found to have negative correlation with employment per enterprise (EPE) and GVAFC (Gross Value Added per unit of Fixed Capital) ; indicating an increase in total no. of own account enterprise results in falling number of employment per enterprise and also a fall in the value added per unit of the fixed capital used by the enterprise. TE is found to be positively correlated with the FC used by an OAME, but is negatively associated with the EPE and GVAFC. The same negative relation is observed between FC and EPE and GVAFC. The correlation between the fixed capital used by an OAME bears high positive correlation with

13 116 GVAPent and GAVPW. The same relation with TE, though positive, is found to be a weak one. This implies capital rather than labour plays an important role in boosting the productivity in the OAMEs of Assam. The employment per enterprise in OAMEs is highly positively influenced by the productivity of the fixed capital used by them. Table25: Correlation among the growth indicators in OAMEs from to Tent TE FA EPE GVAPent GVAPW GVAPFA Tent 1 TE FA EPE GVAPent GVAPW GVAPFA Source: Author s calculation Table 26 shows the interrelations among the growth indicators for the NDMEs of the state IMS. It was found, total number of NDMEs was highly positively correlated with the total employment, fixed capital and the productivity of the enterprise. Employment in these enterprises was also highly positively influenced by the fixed capital used by an NDME and the productivity of such an enterprise. Increasing use of fixed capital per enterprise is found to boost up productivity of an NDME. However the capital productivity of an enterprise is found to be negatively influenced by almost all growth indicators under consideration. Table26: Correlation among the growth indicators in NDMEs from to Tent TE FC EPE GVAPent GVAPW GVAFC Tent 1 TE FC EPE GVAPent GVAPW GVAFC Source: Author s calculation Table 27 presents the correlation analysis for the DMEs of the state. It was found that the all the growth indicators of a DMEs are highly interrelated with each other in case of the highest category of the IMS; i.e., the DMEs. It was found that total number of DMEs is highly positively influenced by the total employment in these enterprises, fixed capital used by them, employment per DME and productivity per enterprise and per worker in these units. In the similar fashion total employment, fixed capital, employment per enterprise and productivity of the enterprise and worker of DME showed high positive correlation with each other. However the productivity of fixed capital showed negative correlation with the other growth indicators, indicating the growth of the employment, enterprise, productivity etc. of a DME have little effect in the growth of the capital productivity of such an enterprise. 15

14 117 Table27: Correlation among the growth indicators in DMEs from to Tent TE FC EPE GVAPent GVAPW GVAFC Tent 1 TE FC EPE GVAPent GVAPW GVAFC Source: Author s calculation V) Conclusions The growth of enterprise and employment in the IMS of Assam and India as well, has experienced a positive growth during the study period. The employment situation in the IMS of Assam is very encouraging; where the growth of employment is higher than the growth of enterprises, especially in the later reform period where the growths of employment in state DMEs are 7 times higher than the employment in the DMEs of the all India level. This has caused the employment enterprise ratio in the state IMS to be much higher than the all India level during the study period. Per enterprise employment is found to be the highest in the state DMEs. The share of enterprises and employment in the urban IMS of the state in the urban IMS of India has fallen in the early reform period, while it increased in the later period of the reform. The decline in the share of enterprises has been higher than the decline in the share of employment, whereas the increase in the share of employment is higher than that of enterprise. This is an indication of the faster growth of the IMS labour force of the state. This increase in the share of the local economy IMS at the national economy is mainly due to the high share of employment and enterprise of the NDMEs and DMEs. OAMEs however have experienced a fall in the share of enterprise and employment during the study period. Female employment in the state IMS have shown positive growth both in the early and later reform period, whereas the male counterpart has shown a negative growth. This follows the national trend. However, the growth of female employment in the IMS of the state was higher than their counterpart at the all India level and at the same time the falling growth of male employment had been slower than the national average. This is a pointer to the fact that both male and female employment in the urban IMS of the state was experiencing expansion during the study period. This is a positive development for the IMS of the state. The growth of PTW in the urban IMS of the state is found to be markedly higher than their FT counterpart during the study period and more so in case of PTFW. The higher growth of PTFW is more pronounced in the later reform period, which has made the overall growth of the PTW in the IMS of the state to be higher than the national average during the period. However due to negative growth of the PTMW during the same period, the overall growth of the PTW turned out to be lower than the national average. The growth of the FTW is found to be higher than the national average during and more particularly in the later reform period. The reforms have widened the scope for both the FTW as well as PTW of the IMS of the state. The study of the growth profile is incomplete without a discussion on the productivity of these enterprises. It is found that the productivity of an IMS enterprise of the state is higher than the national level both in the early and later reform period. The higher growth in productivity is experienced by all the three segments of the state IMS. Productivity is also found to be varying directly with the size of the enterprise. The higher productivity in the urban IMS of the state is mainly contributed by the higher labour productivity than the capital productivity, which grew negatively during the study period. The high labour productivity is mainly because of the high growth in the use of fixed assets and does not necessarily indicate improvement the labour quality. In fact the negative growth in capital productivity during the 15

15 118 study period points to the inefficient utilization of the available resources. Thus it can be concluded that the IMS of the state contribute positively in terms of employment generation and productivity performances; over the study period under consideration. Given the importance of the IMS for a developing country like India in general and relatively backward state like Assam, IMS has the immense potentialities to contribute to the overall development of the state 1 Here Informal sector is considered as a typical urban phenomenon. (Modwell, 2009). 2 Informal manufacturing sectors (IMS) in Indian context are those which are not registered under section 2m (i) and 2m (ii) of the factories act. The maximum employable persons in these enterprises are The words organised / formal and unorganised / informal are used interchangeably. 4 Own Account Manufacturing Enterprises (OAMEs) are the smallest category of the IMS which employ only one hired worker. Non Directory Manufacturing Enterprises (NDMEs) are the second largest components of IMS where employment vary from vary from 2-6. Directory Manufacturing Enterprises (DMEs) are the largest category of the IMS where numbers of hired workers vary from 6 to 9. 5 As the correlation coefficients are based on only 5 pairs of observations (3 observed values from 3 NSSO rounds and 2interpolated values in between), they are purely indicative in nature. (Banerjee, 2007) 6 Persons working for less than or equal to half of the normal working hours of the enterprise on a fairly regular basis are considered as part time workers. 7 Full time workers are those who work for more than half of the period of normal working hours of the enterprise on a fairly regular basis ( major part of the time when the operation of an enterprise are carried out during a reference period; where last month is used as a reference period by NSSO). 8 Fixed assets mean assets of an enterprise in the form of land, building, and other construction, plant &machinery, transport equipment, tools and other fixed assets (new or used) that have a normal economic life of more than one year from the date of acquisition. 9 Gross Value added represents that part of production which is the actual contribution of an enterprise to the economy. It is calculated by deducting total value of input from the total value of output during a reference period 10 GVA per worker= Total GVA/ Total employment 11 GVA per unit of fixed capital= Total GVA/ Total fixed assets used by an IMS enterprise. 15

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