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Establishments which hire workers have higher productivity than the OAEs which have restricted access to finance and are at a greater vulnerability to economic shocks | Photo: Shutterstock.com
The number of Own Account Enterprises (OAEs), which are run solely by the owners and do not employ hired workers, rose by 6.5 million to 55.3 million between 2010-11 and 2022-23, a comparison of the latest Annual Survey on Unincorporated Sector Enterprises (ASUSE) data released by National Statistical Office (NSO) with the 67th National Sample Survey (NSS) round showed.
In contrast, the number of Hired Worker Enterprises (HWEs), which employ at least one hired worker on a fairly regular basis, increased by merely 850,000 units to 9.71 million during the same period, indicating that it is the OAEs that are driving employment in the unorganised sector.
Establishments that hire workers have higher productivity than OAEs, which have restricted access to finance and are more vulnerable to economic shocks. This, in turn, constrains their growth potential and overall contribution to economic development.
Meanwhile, the total number of workers employed by OAEs declined by 1.81 million to 67.95 million in this period. In comparison, the total number of workers in HWEs increased by 3.45 million to 41.7 million in the corresponding time period.
Among states, Uttar Pradesh has the highest number of OAEs (8 million), followed by West Bengal (7.1 million), Maharashtra (4.8 million) and Bihar (3.3 million). However, in the case of HWEs, Maharashtra has the largest number (1.2 million), followed by Uttar Pradesh (990,000) and Tamil Nadu (986,000).
Santosh Mehrotra, visiting professor, University of Bath, said that most OAEs have emerged out of necessity as a survival strategy and their predominance is the underlying symptom of and reason for widespread poverty and a distressed job market condition. “Thus the uptick in the number of establishments that we see is due to this. It is extremely important to come up with supportive policies to develop OAEs into scalable enterprises,” he added.
First Published: Jul 10 2024 | 10:37 PM IST
