Retail trade is an employment spinner, too

Font Size

Print

Feedback

Email

Discuss

Related Articles

Govt plans to guarantee private sector borrowingsCrisis takes toll on jobs, man hoursIndia Inc’s expense bill crosses Rs 1 tn

Employment generation initiatives like food-for-work programme seem to have had a positive impact. The fifth Economic Census report, released on Thursday, said there has been a decent increase of 2.78% in the rate of employment generation in the country during 1998-2005, as compared to the rate of 1.75% during 1990-98.

Most significantly, even as the government is studying the implications of the report by the Indian Council for Research in International Economic Relations (ICRIER) on the ‘Impact of organised retail on the unorganised sector’ released this week, it would be pertinent to note that retail trade alone accounts for 41.83% job opportunities with 14.95 million employed in the sector, according to the Economic Census report.

In fact, establishments involved in retail trade claimed the highest percentage both in the rural (39.28%) and urban (45%) areas. It has been the most sought after activity amongst own account establishments with a share of 48.45%. In rural areas, 46.52% own account establishments were set up for retail trade while the percentage was 51.44 in urban areas.

The ICRIER report, commissioned by the Department of Industrial Policy and Promotion in February this year was to assess whether or not the organised retail would displace the unorganised retailers. The study has given a verdict in favour of modern retail, primarily on the basis of a supply crunch, which would arise if organised retail was not allowed to expand at its current rate of growth, which is pegged at 45-50% annually. Unorganised retail is simply not growing fast enough, ICRIER found.

To minimise the adverse impact of organised retail on traditional retailers, ICRIER has recommended strengthening the role of Competition Commission of India in preventing any collusion or predatory pricing and ensuring availability of institutional credit to the traditional retailers, only 12% of whom apply for bank loans in the first year of retail operations.

The Economic Census has found that retail trade was the preferred activity among establishments with hired workers as well with a share of 31.47%. Manufacturing accounted for 23.17% of the total establishments. Education claimed the third position with a share of 8.91%.

Retail trade along with manufacturing and social and personal service activities have emerged as the three major non-agricultural activities giving the maximum number of jobs, with a share of more than 72% of the total establishments. Manufacturing establishments followed retail trade with 8.32 million people employed. Social and personal service activities employed 7.35% during the review period.

In the non-agricultural activities like retail, manufacturing, real estate and hotels and restaurants, the maximum number of workers were engaged in manufacturing with 25.48 million people followed by 25.14 million workers in retail trade and 7.49 million in education. These three activity groups accounted for about 65% of the total employment in the non-agricultural sector.

Among the agricultural activities, 87% (5.29 million) were involved in rearing animals — as high as 94.3% of the total establishments in this sector were in rural areas.

An interesting finding of the Census is that rural areas had more of the establishments under non-agricultural activities like retail trade, manufacturing, hotels, real estate and education at 55.46 % compared to 44.54% in urban areas.

The situation in the states

A state-wise distribution of all establishments shows that bigger states have comparatively smaller size establishments. Around 5.5 % of total establishments in Arunachal Pradesh and about 11 % of establishments in Dadra and Nagar Haveli and Daman and Diu employ about 10 workers. The all-India average is about 1.5 % of the total establishments employ about 10 workers.

The report further stated that 64.24 % of the total workers worked in establishments that employed less than six workers. Establishments employing 6-9 workers employed 10.24 % of the total workforce while those employing more than 10 workers gave jobs to 25.52 % people during 1998-2005.

Among the states, Tamil Nadu had the maximum number of agricultural establishments (1.09 million) constituting 17.99 % of all agri establishments in the country. It was followed by Andhra Pradesh (16.15%) and Kerala (14.48%).

In case of own account establishments in agricultural activities too Tamil Nadu had the highest number of establishments (19.19%) followed by Andhra Pradesh (16.03%) and Kerala (15.84%).

Andhra Pradesh provided maximum employment in the rural areas (13.14 % of the total rural employment), followed by West Bengal, Tamil Nadu, UP, Kerala and Maharashtra . Among the urban-employment providers, Maharashtra topped the list providing the maximum employment at 14.10 % of total urban employment.

In rural areas, Gujarat (12.90%), Andhra Pradesh (18.71%), Kerala (11.15%) and Tamil Nadu (14.81%) provided for more than 11 % of the total employment in rural agricultural establishments with Andhra Pradesh employing the maximum number at 1.90 million.

In urban areas too each of these states share more than 10 % of total employment in urban agricultural establishments. Kerala had the maximum share of 17.03 %.

As regard to hired workers in the agricultural establishments, the concentration was observed mostly in the states of Maharashtra , Andhra Pradesh, Kerala and Tamil Nadu. Andhra Pradesh provided the maximum of 28.64 % of the total agricultural hired workers.