ANALYSIS LINKING DATA ON WORK IN INFORMAL SECTOR AND POVERTY: CASE STUDY OF INDIA 

 

 

- N.S. Sastry

 

Introduction

 

 

            What are the links among "employment in informal sector", "poverty" and "gender"?  This question has been attracting serious attention of statisticians, economists and policy makers who think that

 

(a)              the link between poverty and economic growth is employment,

(b)              the livelihood of vast majority of workforce in developing countries crucially depends on informal economy and

(c)               support for women's work will, in effect, lead to support for poor households.

 

Sethuraman (1998) undertook a study within the framework of a collaboration between the World Bank (Poverty Reduction and Economic Management Department) and WIEGO (Women in Informal Employment: Globalising and Organising) to review the evidence available from countries as well as other studies at the regional and global level on the links among "gender", "informality" and "poverty".  In this study he formulated certain issues to stimulate further thinking and research based on more reliable data.  These issues are as in the following.

 

(i)                 Are poor households more likely to depend on the informal sector than non-poor households?

(ii)               Are households depending on the informal sector more likely to be poor?

(iii)             Whether higher proportions of poor participate in the informal sector?

(iv)             Are women in poor households more likely to work in the informal sector than women in non-poor households?

(v)               Are women who head households more likely to be in the informal sector than men who head households?

(vi)             Does women's income from informal sector employment, though low, contribute to a reduction in the level of household poverty, especially among the poorest households?

 

The Indian National Sample Survey Organisation (NSSO), in which the author had the good fortune to work as Director General & Chief Executive Officer (1998-2001), included for the first time in 1999-2000 in its large scale employment and unemployment survey, certain probing questions to usual status workers regarding some specific features of the enterprises in which they work.  The survey also collected, through an abridged work sheet, data on the consumer expenditure of the household to which the worker belonged.  The survey was so planned and executed that it was possible to identify the members of the household who were employed as usual status workers in informal sector enterprises.  The gender of the head of household as well as each member of the household was also recorded.  In India, data on the consumer expenditure of household are used as proxy to income of household and form the basis of estimates of poverty.  In view of this context, for the first time, the NSSO could generate and dissiminate in 2001 household level micro data, which could be used to undertake an analysis of links among "employment in informal sector", "poverty" and "gender".  The principal focus of this paper is to explore these links in the Indian context by making use of the micro data at household level available from the 1999-2000 `employment and unemployment' survey of NSSO.  The concepts, definitions, sample design and results related to this survey, which are relevant to the present study, are available in the Reports Nos 458 (Part I & Part II) and 460 issued by NSSO during May-July 2001.  These Reports can be obtained both on hard copy & floppy/CD for a price.  To save space, no attempt is made here to mention the relevant concepts and definitions available in these Reports.

 

In the present study we need certain additional definitions.  We introduce a new definition of a "household sustaining on employment in informal sector" as a household having at least one usual principal status worker in informal sector and no usual principal status worker outside informal sector.  A "household sustaining on self-employment in informal sector" is defined as a household sustaining on employment in informal sector and whose household type code is (a) self-employed in non-agriculture in rural areas and (b) self-employed in urban areas.  A "household sustaining on regular salaried/wage employment in informal sector in urban India" is defined as a household sustaining on employment in informal sector and whose household type code is "regular salary/wage earning" in urban areas.  A "household sustaining on casual wage employment in informal sector in urban India" is defined as a household sustaining on employment in informal sector and whose household type code is "casual labour" in urban areas.  A "female headed household sustaining on employment in informal sector" is defined as a household sustaining on employment in informal sector whose head is a female.

 

Making use of the above additional definitions and the micro data at household level available from the 1999-2000 employment & unemployment survey of NSSO, a set of new tables, not available in Reports Nos 458 and 460, have been specially generated by the NSSO for the present study on a request made to the Chairman of the Delhi Group on Informal Sector Statistics and Secretary, Ministry of Statistics and Programme Implementation, Government of India.  The present study is jointly sponsored by WIEGO and the Council for Social Development, India (in which the author is currently working as a Professor) for consideration and discussion in the Sixth Meeting of the Delhi Group being held in the Brazilian Institute for Geography and Statistics (IBGE) at Rio de Janeiro, Brazil, during 16-18 September 2002.

 

 

 

POVERTY ESTIMATES IN INDIA

 

Poverty is estimated officially in India on the basis of one measure, namely proportion of the population below an exogenously specified poverty line.  For a household, monthly per capita consumer expenditure (MPCE), is its total consumer expenditure over a period of 30 days divided by the number of members in the household (size).  A person's MPCE is understood as that of the household to which he or she belongs.  The Indian Planning Commission, which officially estimates the incidence of poverty based on NSSO household consumer expenditure survey data, has stated in its press note issued on 22 February, 2001 that in 1999-2000 the all-India poverty line corresponds to MPCE level of Rs. 327.56 in rural areas and Rs. 454.11 in urban areas.  The proportion of the population below the specified poverty line (or head count ratio) is officially recognised as "poverty estimate", when the distribution of persons by MPCE is based on the NSS household consumer expenditure survey (CES) data.  In 1999-2000, NSSO conducted a large scale CES, as usual with a detailed schedule wherein around 330 items of consumption expenditure are specified in detail over 15 pages to minimise recall lapse on the part of respondents.  The distribution of persons by MPCE estimated from this CES of NSSO formed the basis for the official poverty estimates in 1999-2000.

 

As already mentioned earlier, in 1999-2000, NSSO also conducted a large scale employment and unemployment survey (EUES) wherein the schedule included an abridged one page worksheet in which 32 different groups of items of consumption were specified and household consumer expenditure data on each of these 32 item groups were collected.  Considering the sizes of the schedules in the CES and EUES, it was thought that it would be very difficult to obtain information for both the schedules from the same household taking into account the fatigue of the respondent.  Therefore, unlike in earlier CES and EUES of NSSO, the CES and EUES schedules in 1999-2000 were canvassed in separate sets of sample households.  This is the reason why EUES schedule contained in 1999-2000 an abridged worksheet of one page to record household consumption expenditure of 32 different groups of items and it was considered adequate because MPCE of the household here was merely a classification variable for tabulation of employment characteristic and not the main subject of enquiry.  However, the household reporting of consumer expenditure in an abridged schedule is known to be affected by a greater degree of recall lapse than in a detailed schedule and hence would tend to understate the total consumer expenditure in comparison with that based on a detailed schedule.  This downward bias may be expected to shift the distribution of persons by MPCE based on EUES to the left of that based on CES in 1999-2000.  In fact, published results of the 1999-2000 EUES and CES indicate that the cumulative distribution function of MPCE based on EUES lies uniformly above that based on CES at the all-India level both in rural and urban areas.  This suggests that the poverty estimate (head count ratio) based on EUES distribution of persons by MPCE would be higher than that based on CES (which is the official estimate) and hence, would at best provide only an upper bound to the comparable official poverty estimate in 1999-2000.

 

In fact, the Indian Planning Comission, based on NSS 1999-2000 CES released at all-India level poverty estimates of 27.09% in rural areas and 23.62% in urban areas.  Based on NSS 1999-2000 EUES, Sundaram and Tendulkar (2001) estimated at all India level poverty ratios of 36.45% in rural areas and 28.76% in urban areas.  Using the household level micro data set of EUES and published CES results, Sundaram and Tendulkar (2001) derived a significant result.  They found that if the understatement arising from the abridged worksheet used for consumption expenditure recording in EUES schedule is adjusted for in the distribution of persons by MPCE and the poverty estimates are made on the basis of such an adjusted distribution, then the adjusted poverty estimates derived from EUES are very close to the official poverty estimates based on CES both in rural and urban areas of India.  This result provides us the requisite confidence that the distributions of persons by MPCE in rural as well as urban India derived from 1999-2000 EUES can be used as yardsticks (standards) for obtaining valid and reliable comparisons and conclusions on the links among poverty, employment in Informal Sector and gender.  >From now onwards we, therefore, concentrate on the results obtained from an analysis of the data collected on `employment in informal sector', `household consumer expenditure' and `gender' in the 1999-2000 EUES of NSSO.

 

RESULTS

 

All Households

 

Based on data collected in EUES of 1999-2000, the distributions of households and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 1R and 1U respectively. (All Statements are placed at the end).

 

(i)         From Statements 1R and 1U it   may be derived that expenditure of less than Rs. 300/- per month per person was incurred in rural India by 22%   of households accounting for 26% of population and in urban India by about 6% of households accounting for nearly 8% of population.

 

(ii)               In rural India, about 33% of households accounting for nearly 38% of            population spent less than Rs. 340/- per month per person whereas in urban India, about 10% of households accounting for nearly 14% of population spent less then Rs. 350/- per month per person.

 

(iii)             In urban India, about 19% of households with nearly 25% of population   had MPCE less than Rs. 425/-, while about 28% of households with nearly 36% of population incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on employment in informal sector

 

The distributions of households sustaining on employment in informal sector and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 2R and 2U  respectively.

 

(i)      From Statements 2 R and 2U it may be derived that expenditure of less than Rs. 300/- per month per person was incurred (a) in rural India by about 17% of households sustaining on employment in informal sector accounting for nearly 21% of persons belonging to such households and  (b) in urban India by about 7% of such households accounting for nearly 9% of persons therein.

 

(ii)         In rural India, about 26% of households sustaining on employment in informal sector accounting for nearly 31% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 12% of such households accounting for 16% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)         In urban India, about 22% of households sustaining on employment in informal sector with nearly 28% of persons belonging to such households had MPCE less than Rs. 425/-, while about 33% of such households with nearly 41% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on self-employment in informal sector

 

The distributions of households sustaining on self-employment in informal sector and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 3R and 3U respectively.

 

(i)         From Statements   3R and 3U  it  may  be   derived that   expenditure of  less  than  Rs.300/- per month per person was incurred (a) in rural India by about 17% of households sustaining on self-employment in informal sector accounting for nearly 20% of persons belonging to such households and (b) in urban India by about 6% of such households accounting for nearly 8% of persons therein.

 

(ii)               In rural India, about 26% of households sustaining on self-employment in informal sector accounting for nearly 31% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 10% of such households accounting for nearly 14% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)             In urban India, about 20% of households sustaining on self-employment in informal sector with nearly 26% of persons belonging to such households had MPCE less than Rs. 425/-, while about 32% of such households with nearly 38% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

 Households sustaining on regular wage/salaried employment in informal sector in urban India.

 

The distributions of households sustaining on regular wage/salaried employment in informal sector in urban India and corresponding persons by MPCE class are presented in Statement 4U.

 

(i)         From Statement 4U it  may be derived that expenditure  of less than Rs. 300/- per month per person was incurred in urban India by about 4% of households sustaining on regular wage/salaried employment in informal sector accounting for nearly 6% of persons belonging to such households.

 

 

(ii)        In urban India, about 8% of households sustaining on regular   wage/salaried employment in informal sector accounting for nearly 12% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)       About 16% of households sustaining on regular wage/salaried employment in informal sector in urban India with nearly 23% of persons belonging to such households had MPCE less than Rs. 425/-, while about 26% of such households with nearly 35% persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on casual wage employment in informal sector in urban India

 

The distributions of households sustaining on casual wage employment in informal sector in urban India and corresponding persons by MPCE class are presented in Statement 5U

 

(i)         From Statement 5U it may be derived that expenditure of less than Rs.300/- per month   per person was incurred in urban India by   about 15% of   households sustaining on casual wage employment in informal sector accounting for nearly 20% of persons belonging to such households.

 

(ii)        In urban India, about 24% of households sustaining on casual wage employment in informal   sector accounting for   nearly 31% of persons   therein spent less than Rs.  350/- per month per person.

             

(iii)       Thirty nine (39) percent of households sustaining on casual wage employment in informal sector in urban India with nearly 49% of persons   belonging to such households had MPCE less than Rs. 425/-, while     about 53% of such households with nearly 64% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

 

 

Female headed households sustaining on employment in informal sector

 

The distributions of female headed households sustaining on employment in informal sector and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 6R and 6U respectively.

 

(i)         From Statements 6R and 6U it  may be derived that   expenditure  of less  than Rs.300/- per month per person was incurred (a) in rural India by 16% of female headed households sustaining on employment in informal sector accounting for nearly 18% of persons belonging to such households and (b) in urban India by about 9% of such households accounting for nearly 12% of persons therein.

 

(ii)               In rural India, about 25% of female headed households sustaining on employment in informal sector accounting for 29% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 16% of such households accounting for nearly 22% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)             In urban India, about 27% of female headed households sustaining on employment in informal sector with nearly 34% of persons belonging to such households had MPCE less than Rs. 425/-, while about 38% of such households with nearly 45% of persons therein incurred expenditure of less than Rs. 500/- per month per person.   

 

Households sustaining on employment in informal sector with

only 1 male usual principal status worker (15 years & above)

 

The distributions of households sustaining on employment in informal sector with only 1 male usual principal status worker (15 years & above) and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 7R and 7U.

 

(i)         From Statements 7R and 7U it may derived that expenditure of less than Rs. 300/- per month per person was incurred  (a) in rural India by about 16% of households sustaining on employment in informal sector with only 1 male usual principal status worker (15 years & above) accounting for nearly 20% of persons belonging to such households and (b) in urban   India by about 5% of such households accounting for nearly 8% of persons therein.

 

(ii)               In rural India, about 24% of households sustaining on employment in informal sector with only 1 male usual principal status worker (15 years & above) accounting for nearly 29% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 10% of such households accounting for nearly 14% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)       In urban India, about 19% of households sustaining on employment in informal sector with only 1 male usual principal status worker (15 years & above) and with nearly 25% of persons belonging to such households had MPCE less than Rs. 425/-, while about 28% of such households with 37% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above)

 

The distributions of households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above) and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 8R and 8U respectively.

 

(i)         From Statements 8R and 8U it may be derived that expenditure of less than Rs. 300/- per month per person was incurred (a) in rural India by 20% of households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above) accounting for nearly 28% of persons belonging to such households and (b) in urban India by about 10% of such households accounting for nearly 14% of persons therein.

 

(ii)               In rural India, about 31% of households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above) accounting for nearly 40% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 16% of such households accounting for nearly 23% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)       In urban India, about 27% of households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above) and with 34% of persons belonging to such households had MPCE less than Rs.425/-, while about 38% of such households with nearly 45% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (15 years & above)

 

The distributions of households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (15 years & above) and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 9R and 9U respectively.

 

(i)         From Statements   9R and 9U it may be derived   that expenditure   of less than Rs. 300/- per month   per person was   incurred   (a) in rural India by about 25% of households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (15 years & above) accounting for nearly 30% of persons belonging to such households and (b) in urban India by about 10% of such households accounting for nearly 13% of persons therein.

 

(ii)               In rural India, 36% of households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (15 years & above) accounting for nearly 41% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 18% of such households accounting for nearly 22% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)       In urban India, about 30% of households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (15 years & above) and with nearly 35% of persons belonging to such households had MPCE less than Rs. 425/-, while about 45% of such households with nearly 52% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on employment in informal sector with

no literate member of age 15 years & above

 

The distributions of households sustaining on employment in informal sector with no literate member of age 15 years & above and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 10R and 10U respectively.

 

(i)         From Statements 10R and 10U it may be derived that expenditure of less than Rs. 300/- per month per person was incurred (a) in rural India by about 29% of households sustaining on employment in informal sector with no literate member of age 15 years & above accounting for nearly 36% of persons belonging to such households and (b) in urban India by about 17% of such households accounting for nearly 25% of persons therein.

 

(ii)               In rural India, about 41% of households sustaining on employment in informal sector with no literate member of age 15 years & above accounting for nearly 50% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 28% of such households accounting for nearly 39% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)             In urban India, about 44% of households sustaining on employment in informal sector with no literate member of age 15 years & above and with nearly 58% of persons belonging to such households had MPCE less than Rs. 425/-, while about 59% of such households with 73% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Households sustaining on employment in informal sector with no literate female member of age 15 years & above

 

The distributions of households sustaining on employment in informal sector with no literate female member of age 15 years & above and corresponding persons by MPCE class for rural and urban sectors of India are presented in Statements 11R and 11U respectively.

 

(i)          From Statements 11R and 11U it may be derived that expenditure of less than Rs 300/- per month  per person was incurred   (a)   in rural   India by   about   23% of  households   sustaining on  employment in  informal sector with no literate female member of age 15 years & above accounting for nearly 29% of persons belonging  to  such  households and   (b) in urban   areas by about 10% of   such   households accounting for nearly 17% of persons therein.

 

(ii)                 In rural India, about 33% of households sustaining on employment in informal sector with no literate female member of age 15 years & above accounting for nearly 41% of persons belonging to such households spent less than Rs. 340/- per month per person whereas in urban India, about 18% of such households accounting for 28% of persons therein spent less than Rs. 350/- per month per person.

 

(iii)             In urban India, about 31% of households sustaining on employment in informal sector with no literate female member of age 15 years & above and with nearly 46% of persons belonging to such households had MPCE less than Rs. 425/-, while about 44% of such households with nearly 61% of persons therein incurred expenditure of less than Rs. 500/- per month per person.

 

Summary of findings & Conclusions

 

Major findings of the present study are summarised in Statement 12.

 

Sundaram and Tendulkar (2001) presented in their paper a table giving the percentage understatement of the abridged schedule based MPCE in EUES with respect to the detail schedule based MPCE available from CES in 1999-2000.  These were given for each MPCE class of rural and urban India both for the mean MPCE of a class as well as the upper terminal value of MPCE class.  We reproduce this in Statement 13.

 

            We have   indicated in paragraph   6 of this paper that official poverty line in 1999‑2000 corresponds to MPCE level of Rs. 327.56 in rural India and Rs. 454.11 in urban India and poverty estimation is done officially using CES data.  It may be seen from Statement 13 that corresponding to upper terminal value of Rs. 300 MPCE in rural India, the understatement in EUES is about 7% relative to MPCE value in CES.  It implies that Rs. 300 MPCE level in EUES may be considered equivalent to Rs. 321 MPCE level in CES, and therefore it is the nearest upper terminal value in EUES corresponding to the poverty line of Rs. 327.56 in rural India in 1999-2000.  On similar consideration, in urban India the MPCE level of Rs.  425 in EUES may be taken to correspond to the MPCE level of Rs. 456 in CES, (as understatement in EUES is 7.29% from statement 13) and therefore it is the nearest upper terminal value in EUES corresponding to the poverty line of Rs. 454.11 in urban India.  From these approximations, we may consider the poverty line in EUES as nearer to Rs. 300 MPCE level in rural India and Rs. 425 MPCE level in urban India.  Consequently the percentages of persons given in col. 3 for rural India and col. 11 for urban India in Statement 12 of the present study qualify to be considered as adjusted poverty estimates in 1999-2000 from the data of EUES for understanding the links among "employment in informal sector", "Poverty" and "gender", in the Indian context.  The following conclusions are, therefore, drawn.

 

(i)            Among the persons of the households sustaining on employment in   informal sector, nearly 21% in rural India and 28% in urban India were below the poverty line in 1999-2000.

 

(ii)               In the households sustaining on self-employment in informal sector, poverty was estimated to be nearly 20% in rural India and 26% in urban India in 1999-2000.

 

(iii)             In urban India, among members of the households sustaining on regular salary/wage employment in informal sector, percentage of persons below the poverty line was nearly 23 in 1999-2000.

 

(iv)              Households sustaining on casual wage employment in informal sector in urban India recorded poverty estimate of nearly 49% in 1999-2000.

 

(v)                In female headed households sustaining on employment in informal sector, estimate of poverty was nearly 18% in rural India and 34% in urban India in 1999-2000.

 

(vi)              In households sustaining on employment in informal sector with only 1 male usual principal status worker (age 15 years & above), there were nearly 20% of persons in rural India and 25% of persons in urban India below poverty line in 1999-2000.

 

(vii)            The poor constituted nearly 28% in rural India and 34% in urban India among the persons belonging to households which sustain on employment in informal sector with only 1 female usual principal status worker (age 15 years & above) in 1999-2000.

 

(viii)          In households sustaining on employment in informal sector with only 1 male and 1 female usual principal status workers (age 15 years & above), poverty was estimated to be nearly 30% in rural India and 35% in urban India in 1999-2000.

 

(ix)              Households sustaining on employment in informal sector with no literate member (age 15 years & above) reported poverty estimate of nearly 36% in rural India and 58% in urban India in 1999-2000.

 

(x)                In households sustaining on employment in informal sector with no literate female member (age 15 years & above), there were nearly 29% of persons in rural India and 46% of persons in urban India below poverty line in 1999-2000.

 

(xi)              In rural India adjusted poverty estimate based on EUES was nearly 26% compared to the estimate of 27% based on CES in 1999-2000.

 

(xii)            In urban India adjusted poverty estimate based on EUES was nearly 25% compared to the estimate of nearly 24% based on CES in 1999-2000.

 

(xiii)          In rural India compared to the poverty situation in the entire population in 1999-2000., lower poverty  was observed among the persons belonging to households which sustained on (a) employment in informal sector, (b) self-employment in informal sector, (c) employment in informal sector and were headed by females, and (d)  employment in informal sector with only 1 male usual principal status worker (age 15 years & above).

 

(xiv)          In rural India, compared to poverty level in entire population in 1999-2000, higher poverty was recorded among the persons belonging to households which sustained on (a) employment in informal sector with only 1 female usual principal status worker (age 15 years & above), (b) employment in informal sector with only 1 male and 1 female usual principal status workers (age 15 years & above), (c) employment in informal sector with no literate member (age 15 years & above) and (d) employment in informal sector with no literate female member (age 15 years & above).

 

(xv)            In urban India, compared to poverty estimate in general population in 1999-2000, poverty was at nearly same or lower levels among persons belonging to households which sustained on (a) self-employment in informal sector, (b) regular salary/wage employment in informal sector and (c) employment in informal sector with only 1 male usual principal status worker (age 15 years & above)

 

(xvi)          In urban India, compared to poverty situation in general population in 1999-2000, poverty estimate was higher among the persons belonging to households which sustained on (a) employment in informal sector, (b) casual wage employment in informal sector, (c) employment in informal sector and were headed by females, (d) employment in informal sector with only 1 female usual principal status worker (age 15 years & above), (e) employment in informal sector with only 1 male and 1 female usual principal status workers (age 15 years & above), (f)  employment in informal sector with no literate member (age 15 years & above) and (g) employment in informal sector with no literate female member (age 15 years & above).

 

(xvii)        For rural India, in 1999-2000 lowest poverty estimate (18%) was recorded among members of female headed households sustaining on employment in informal sector and highest poverty estimate (36%) was reported among persons belonging to households sustaining on employment in informal sector with no literate member (age 15 years & above).

 

(xviii)      For urban India, in 1999-2000 lowest poverty estimate (23%) was reported among the members of households sustaining on regular salary/wage employment in informal sector and highest poverty estimate (58%) was observed among persons belonging to households which sustained on employment in informal sector with no literate member (age 15 years & above).

 

(xix)   In general, poverty situation was worse in urban informal sector than in rural informal sector in 1999-2000, whereas in entire population poverty estimate was higher in rural India as compared to the poverty estimate in urban India.

 

(xx)    In India there was substantial presence of the poor in the informal sector, especially in the urban informal sector in 1999-2000.

.

Need for Research Support

 

            The present study is an example of what evidence-based research can be done with unit (household/enterprise) level micro-data sets, if only the agencies collecting valuable data on different facets of informal economy not only analyse and publish macro level estimates of their immediate interest but also enable the supply of unit level data (after suppressing the identification details for reasons of statistical confidentiality) to other agencies for in-depth future research on several other aspects.  Preservation, harmonisation and synergisation of micro (unit level) data sets on related subjects of enquiry over time and across different sources of data are essential prerequisites for promoting evidence-based research on informal economy.  In view of policy implications of immense significance, urgent need is felt to establish an “International Centre for Development of Informal Economy” which can mobilise adequate support for (a) planning, collection, compilation, analysis and preservation of relevant data, (b) undertaking in-depth socio-economic research studies on informal economy and (c) facilitating the formulation of appropriate policies and programmes of action, especially in developing countries.

 

There are a number of directions in which the present study can be extended with requisite research support.

 

(i)                 Depending on the adequacy of realised sample sizes, State level analysis can be done for selected major States of India.  Superimposing small area methods of estimation, even for smaller States certain key parametres can be estimated.

 

(ii)               Analysis can be extended to selected broad industry groups in informal sector such as manufacturing, trade, transport, hotels and restaurants, etc.

 

(iii)             Similar analysis is possible based on the concept of “informal employment” as compared to the concept of “employment in informal sector” used in the present study.

 

(iv)              Unit level data can be used to analyse certain socio-economic determinants of poverty observed in the informal sector / economy.

 

(v)                Econometric model based studies using the unit level data may throw up further insights.

 

Acknowledgements

 

            The author wishes to acknowledge with thanks the support received from WIEGO, Council for Social Development (CSD) of India, Chairman of Delhi Group on Informal Sector Statistics and Secretary, Ministry of Statistics & Programme Implementation, Government of India and the former colleagues in the Indian National Sample Survey Organisation. The author alone is responsible for the findings, interpretations and conclusions expressed in this paper, and errors that may remain.

 

References

 

National Sample Survey Organisation: Report no. 458 (Part I & Part II) on Employment and Unemployment Situation in India, 1999-2000 and Report no. 460 on Non-agricultural workers in Informal Sector based on Employment and Unemployment Survey, 1999-2000.

 

Sethuraman, S.V. (1998): Gender, Informality, and Poverty: A Global Review (Gender bias in female informal employment and incomes in developing countries) Executive Summary of draft version presented at Annual Meeting of WIEGO, Ottawa, April 12-14, 1999.

 

Sundaram, K and Tendulkar, Suresh D. (2001): Recent Debates on Data Base for Measurement of Poverty in India: Some fresh evidence, paper presented at the Workshop on Poverty Monitoring and Evaluation jointly organised by the World Bank and Planning Commission, New Delhi, India, January 11-12, 2002.

 

Statement 1R: Per 1000 distribution of households and persons therein by MPCE (Rs.) class during 1999-2000 in EUES.

 

 

Statement 1U: Per 1000 distribution of households and persons therein by MPCE  (Rs.) class during 1999-2000 in EUES.

 

 

Statement 2R: Per 1000 distribution of households sustaining on employment in informal sector and persons therein by MPCE (Rs.) class during 1999-2000

 

 

Statement 2U: Per 1000 distribution of households sustaining on employment in informal sector and persons therein by MPCE (Rs.)  class during 1999-2000

 

 

Statement 3R: Per 1000 distribution of households sustaining on self-employment in informal sector and persons therein by MPCE (Rs.) class during 1999-2000

 

 

 

Statement 3U: Per 1000 distribution of households sustaining on self-employment in informal sector and persons therein by MPCE (Rs.) class during 1999-2000

 

 

Statement 4U: Per 1000 distribution of households sustaining on regular wage/salaried employment in informal sector in Urban India and persons therein by MPCE  (Rs.) class during 1999-2000

 

 

 

Statement 5U: Per 1000 distribution of households sustaining on casual wage employment in informal sector in urban India and persons therein by MPCE (Rs.) class during 1999-2000

 

 

 

Statement 6R: Per 1000 distribution of female headed households sustaining on employment in informal sector and persons therein by MPCE     (Rs.) class during 1999-2000

 

 

 

Statement 6U: Per 1000 distribution of female headed households ustaining on employment in informal sector and persons therein by MPCE (Rs.) class during 1999-2000

 

 

 

Statement 7R: Per 1000 distribution of households sustaining on employment in informal sector with only 1 male usual principal status worker(15 years & above) and persons therein by MPCE (Rs.) class during 1999-2000

 

 

 

Statement 7U: Per 1000 distribution of households sustaining on employment in informal sector with only 1 male usual principal status worker (15 years & above) and persons therein by MPCE (Rs.) class during 1999-2000

 

 

Statement 8R: Per 1000 distribution of households sustaining on employment in informal sector with only 1 female usual principal status worker (15 years & above) and persons therein by MPCE (Rs.) class during 1999-2000