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NSSO's 51% self-employed data reflects huge under-employment: economists

Dilasha Seth  |  New Delhi 

Rahul Singh, 29, sells flowers at the traffic red lights, earning Rs 60-70 a day on an average. Rahul is counted among the 51 per cent ‘self-employed’ in the recent National Sample Survey Organisation study. Chief Statistician T C A Anant agrees ‘self employment’ is an omnibus category, from a shoe-shiner to a doctor.

Terming a vast majority of the self-employed as under-employed, Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry (Ficci), said: “The majority of the section comprises street vendors, hawkers or people who don’t have jobs and can’t afford to sit unemployed.” He says offivial figures of unemployment at two per cent of the labour force and poverty at 32 per cent of the population do not reconcile.

“The self-employed figure possibly reflects the lack of employment opportunities, as well as the lack of employability. Even if there are jobs, people are not skilled enough,” pointed out Crisil chief economist D K Joshi. Vocational training programmes and re-skilling would possibly change the situation, he said.

CARE Ratings chief economist Madan Sadnavis says a majority of the self-employed constitute the unorganised sector.

While 51 per cent of the workforce is self-employed in India, the proportion is much smaller in the developed world. Only about 10.9 per cent of the US workforce is self-employed. Germany has 12 per cent, Japan 10 per cent and Britain 14 per cent as self-employed of the total workforce. “The self-employed number in developed nations is going up,” says Anant. Self-employment in these nations is mostly in the organised sector and results in acceleration in job creation, unlike in India.

“Both the US and Indian economies are services-driven; the difference lies in the quality. It is a major drawback that the quality of the workforce is not measured or estimated,” said Sabnavis.

According to Anant, the comparison between India and the developed nations is uncalled for. “We did not follow a traditional path of development like the developed nations, where the economy moved from self-employment to wage laborers to again self-employment through services,” he said.

The percentage of self-employed rural women is higher at 56 per cent, compared to rural men at 54 per cent. Anant attributed this to the existence of a cultural bias, where women are considered better being self-employed than working under someone. Rajiv Kumar says if 56 per cent of the female rural force was actually self-employed, in the real sense, there wouldn’t be any poverty. “The quantity does not match with the quality, as they are not contributing to economic growth,” he added.

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First Published: Mon, July 04 2011. 00:24 IST