Payment to urban workers in Gujarat's small enterprises worse than national average

By Rajiv Shah
A new Government of India survey has revealed that urban Gujarat’s “unincorporated enterprises” – those which are not registered under the Companies Act, 1956 – are poor pay masters compared to as many as 10 states. Conducted in 2015-16 by the National Sample Survey Organization (NSSO), the survey shows that Gujarat’s hired workers earned on an average Rs 90,146 per person per annum, which is less than the national average of Rs 92,441.
According to the survey, there are as many as 15,99,681 workers hired in urban Gujarat’s unincorporated enterprises, which is 7.5% of urban India’s hired workers (2,12,31,016) in the same category. The survey covers non-agricultural enterprises belonging to three manufacturing, trade and other services sectors, excluding construction.
In the Gujarat’s rural areas, there are 3,34,741 falling in the same category, forming 4.07% of India (8,20,4501). Ironically, Gujarat’s rural workers in these enterprises earned more than double the amount earned in the urban areas – Rs 1,93,925 – as against the national average of just Rs 74,871. No reason has been given by NSSO experts about this urban-rural gap in payments in unincorporated enterprises.
Unincorporated enterprises are largely involved in small scale or petty business, “engaged in the production and/ or distribution of some goods and/ or services meant mainly for the purpose of sale, whether fully or partly”, and are “owned and operated by a single household or by several households jointly, or by an institutional body”, to quote from the report, “Key Indicators of Unincorporated Non-Agricultural Enterprises (Excluding Construction) in India”.
The enterprises of the states which are better paymasters than Gujarat to their workers are – Haryana (Rs 1,38,395), Kerala (Rs 1,27,027), Maharashtra (Rs 1,11,973), Delhi (Rs 1,07,210), Karnataka (Rs 1,06,761), Rajasthan (Rs 1,02,320), Goa (Rs 1,00,087), Telangana (Rs 94,878), Himachal Pradesh (Rs 94,549), and Tamil Nadu (Rs 94,406).
As many as 36.8% of urban Gujarat’s enterprises operate from own households, while 38.6% operate under permanent structures, as against the national average of 33.9% and 49.6%. Another 12.8% in Gujarat operate as street vendors, 8.4% as “mobile market” in urban Gujarat.
The NSSO’s 73rd round survey is a follow-up of the 67th round, the first which covered the entire unincorporated non-agricultural sector (excluding construction). Apart from covering household industries, shops, street vendors, the enterprises operating in permanent structures included those engaged in cotton ginning, cleaning and baling, manufacturing beedi, proprietary and partnership enterprises, self-help groups (SHGs), and non-profit institutions.
The survey covered formal hired workers, having continuity of job and eligible for paid annual leave and also eligible for social security benefits like provident fund or insurance provided by the employer, as also informal hired workers, who do not have continuity of job and/or not eligible for paid annual leave and/or not eligible for social security benefits like provident fund or insurance provided by the employer.
“Own account enterprises (OAEs), i.e. enterprises that do not employ any hired worker on a fairly regular basis), had a dominant share in the unincorporated non-agricultural enterprises (excluding construction)”, the report said. At all India level, in the urban areas, these constituted 76.6% of all enterprises covered for the survey.