Estimating Informal Employment and Poverty in India

Discussion Paper Series - 7
Estimating Informal Employment

&
Poverty in India
Prof. N.S. Sastry
Council for Social Development
The analysis and policy recommendations of this Paper do not necessarily reflect the views of the
United Nations Development Programme, its Executive Board or its Member States.
ACKNOWLEDGEMENTS
This study is the result of collaboration between the Human Development Resource Centre, UNDP India and
the Council for Social Development (CSD), New Delhi.
Prof. N.S. Sastry in CSD received constant support from the Ministry of Statistics and Programme Implemen-
tation (MOSPI) during the course of the study. Prof. Sastry acknowledges the Ministry’s support in providing
data and processing it.
This study benefited immensely from technical discussions and comments received from participants in the
meetings of Expert Group on Informal Sector Statistics. Special thanks are also due to Mr. K.K. Jaswal and
Dr. Adarsh Kishore from MOSPI, Dr. G. Raveendran and his colleagues in the Central Statistical Organisation.
Thanks are due to Mr. M.D. Asthana and Ms. Madhur Saxena of CSD for their support.
Prof. N.S. Sastry was able to complete this work in a year with continuous encouragement and support from Prof.
K. Seeta Prabhu, Head, HDRC and her team, particularly Dr. Suraj Kumar, Ms. Ritu Mathur and Mr. V. Srinivasan.
The study has been edited by Ms Harjeet Ahluwalia, journalist.
Special mention must also be made of the valuable interactions with and technical discourse from Ms. Martha
Chen, Prof. Jacques Charmes and Ms. Joann Vanek, WEIGO, Mr. Ralf Hussmans, ILO, Ms. Renana Jhabvala,
SEWA, and Prof. Jemol Unni, Gujarat Institute of Development Research. The study benefited from the feed-
back received from Prof. Amitabh Kundu, Jawaharlal Nehru University.
Prof. Sastry would like to acknowledge and record his deep appreciation for the immense cooperation and
encouragement received from his wife Ms. N.V. Satyavaty even when she is going through serious illness. But
for her courageous attitude towards life and ability to inspire her husband through extremely difficult circum-
stances, this study would not have seen the light of day.
PROLOGUE
India has built up a rich database on the informal economy over the decades through the National Sample
Surveys conducted annually. It is also in the forefront of international efforts to tackle unemployment and
poverty, but the requisite methodology to translate this vast repository of statistics into meaningful policy
approach at the national level is yet to evolve.
This study tests the international conceptual framework on the 1999-2000 National Sample Survey data. It
makes several observations on the informal sector, informal employment and the rural-urban scenarios at both
the national and State levels. The methodology and conclusions of the study can be applied to subsequent
surveys as well, making it possible for policy-makers and analysts to identify areas where informal employment
needs intervention and the processes that lead to unemployment.
Prof. N.S. Sastry is an expert on informal sector statistics. He is former Director General and Chief Executive
Officer of the National Sample Survey Organisation, and chaired the (Delhi) Expert Group on Informal Sector
Statistics at its fourth meeting in Geneva. Prof. Sastry also regularly participated in the Expert Group (third to
seventh) meetings.
iv
CONTENTS
EXECUTIVE SUMMARY 1
I INTRODUCTION 5
Conceptual Framework 5
Informal Employment & Employment in Informal Sector 6
Employment in Informal Sector, Poverty & Gender 7
Employment Quality & Income Levels 8
Perceptions: An Overview 8
II METHODOLGY & DEFINITIONS 10

Framework 10
Employment Data collected in NSS 13
Classification of Industries & Occupations 15
The Informal Sector 16
Classifying Informal Sector Enterprises 17
Defining Households 20
Measuring Poverty 21
NSS & Poverty Estimates 21
Household Consumer Expenditure 21
III ESTIMATION OF INFORMAL EMPLOYMENT 23

Informal Employment among Non-agricultural Workers 23
Workers in Formal & Informal Sector Enterprises 25
Informal Employment among Agricultural Workers 27
Informal Employment among All Workers 27
Estimates of Aggregates for Informal Employment 34
IV EMPLOYMENT IN INFORMAL SECTOR, POVERTY & GENDER 37

Exploring the Linkages 37
Poverty and Nature of Employment 37
v
Share of Poor Households in Total Person-days of Employment 39
Households with Employment in Informal Sector: Incidence of Poverty 40
State-level Results 45
Inter-State Comparisons 61
Success Stories 62
Poverty Ratio Variations 65
Concluding Remarks 77
ANNEXURE: INFORMAL EMPLOYMENT: EVOLVING PERSPECTIVES 78
LIST OF TABLES
3.1 Percentage distribution of non-agricultural workers (PS+SS) reporting 24
enterprise type - 1999-2000
3.2 Percentage of non-agricultural workers (PS+SS) reporting enterprise 26
type and percentage of informal employment among non-agricultural
workers (PS+SS) by population segment of India - 1999-2000.
3.3 Percentage distribution of agricultural workers (PS + SS) - 1999-2000 27
3.4 Percentage of informal employment among all workers (PS + SS) by 28
population segment of India - 1999-2000
3.5 Percentage distribution of manufacturing workers (PS + SS) reporting 29
3.6 Percentage of manufacturing workers (PS + SS) reporting enterprise type 30
and percentage of informal employment among manufacturing workers
(PS+SS) by population segment of India - 1999-2000
3.7 Percentage distribution of construction workers (PS + SS) reporting 31
3.8 Percentage of construction workers (PS + SS) reporting enterprise type 32
and percentage of informal employment among construction workers
(PS+SS) by population segment of India - 1999-2000
3.9 Percentage distribution of trade workers (PS + SS) reporting enterprise 33
type - 1999-2000
3.10 Percentage of trade workers (PS + SS) reporting enterprise type and 34
percentage of informal employment among trade workers (PS + SS)
by population segment of India - 1999-2000
3.11 Estimates (in ’000) of usual status (principal + subsidiary) workers as 36
on 1.1.2000
4.1 Percentage of very poor, moderately poor and poor households in each 38
household type - 1999-2000, Rural India
vi
4.2 Percentage of very poor, moderately poor and poor households in each 38
household type - 1999-2000, Urban India
4.3 Percentage of person-days of employment taken up on current daily 39
status basis by members (males, females, persons) of very poor,
moderately poor and poor households for each type of employment -
1999-2000, Rural India
4.4 Percentage of person-days of employment taken up on current daily 40
status basis by members (males, females, persons) of very poor,
moderately poor and poor households for each type of employment -
1999-2000, Urban India
4.5 Poverty ratios among persons of households sustaining on 40
employment in informal sector by broad industry division - All-India, 1999-2000
4.6 Poverty ratios among persons of households sustaining on self- 41
employment in informal sector by broad industry division - All-India, 1999-2000
4.7 Poverty ratios among persons of households sustaining on 42
employment in informal sector by household type and by broad
industry division - Urban India, 1999-2000
4.8 Poverty ratios among persons belonging to female-headed 42
households sustaining on employment in informal sector by broad
industry division - All India, 1999-2000
4.9 Poverty ratios among persons in households sustaining on 43
employment in informal sector with only one male usual principal
status worker (15 years & above) by broad industry division -
All India, 1999-2000
employment in informal sector with only one female usual
principal status worker (15 years & above) by broad industry
division - All India, 1999-2000
employment in informal sector with only one male and one female
usual principal status workers (15 years & above) by broad industry
employment in informal sector with no literate member of age 15 years
and above by broad industry division - All India, 1999-2000
employment in informal sector with no literate female member of age
15 years and above by broad industry division - All India, 1999-2000
4.14 Andhra Pradesh – Poverty ratios during 1999-2000 among members 47
of different types of households
4.15 Assam – Poverty ratios during 1999-2000 among members of 48
different types of households
vii
4.16 Bihar – Poverty ratios during 1999-2000 among members of 49
4.17 Gujarat – Poverty ratios during 1999-2000 among members of 50
4.18 Haryana – Poverty ratios during 1999-2000 among members of 51
4.19 Himachal Pradesh – Poverty ratios during 1999-2000 among members 52
4.20 Karnataka – Poverty ratios during 1999-2000 among members of 53
4.21 Kerala – Poverty ratios during 1999-2000 among members of 54
4.22 Madhya Pradesh – Poverty ratios during 1999-2000 among members 55
4.23 Maharashtra – Poverty ratios during 1999-2000 among members 56
4.24 Orissa – Poverty ratios during 1999-2000 among members of 57
4.25 Punjab – Poverty ratios during 1999-2000 among members of 58
4.26 Rajasthan – Poverty ratios during 1999-2000 among members of 59
4.27 Tamil Nadu – Poverty ratios during 1999-2000 among members 60
4.28 Uttar Pradesh – Poverty ratios during 1999-2000 among members 62
4.29 West Bengal – Poverty ratios during 1999-2000 among members 63
4.30 Inter-State comparisons of poverty ratios among members of 65
different types of households during 1999-2000
4.31 Inter-State variation in incidence of poverty (%) during 70
1999-2000 among members of different types of households (Rural India)
4.32 Inter-State variation in incidence of poverty (%) during 72
1999-2000 among members of different types of households (Urban India)
4.33 Inter-State variation in intensity of poverty (%) during 73
1999-2000 among members of different types of households (Rural India)
4.34 Inter-State variation in intensity of poverty (%) during 75
1999-2000 among members of different types of households (Urban India)
viii
ABBREVIATIONS
CES Consumer Expenditure Survey

EUES Employment and Unemployment Survey
ICLS International Conference of Labour Statisticians
ICSE International Classification of Status in Employment
ILO International Labour Office
MPCE Monthly Per Capita Expenditure
NE Not Existing
NR Not Relevant to Informal Employment
NSS National Sample Survey
NSSO National Sample Survey Organisation
PS Principal Usual Activity Status
SNA System of National Accounts
SS Subsidiary Economic Activity Status
ix
Executive Summary
The Background number of informal jobs in a given refer-

ence period.
The policy relevance of the informal
sector in the economic development of Policy-oriented research requires statis-
India is well recognised. Workers who tical studies on various aspects of the
derive employment largely from the in- informal economy in general. At the
formal economy comprise the highest same time, these studies must be able
proportion of the workforce. Yet, it is to analyse the formal and informal
only of late that policy attention is be- components of total employment as per
ing paid to their peculiar situation and status in employment – such as own-
towards creating an environment in account workers, employers, contrib-
which economic growth and its benefits uting family workers or employees – as
percolate the lives of informal workers well as explore linkages between ‘em-
as well. ployment in informal sector’, ‘poverty’
and ‘gender’.
The problems of unemployment and
under-employment in the country can The 55th Round of National Sample
be resolved by focused efforts to enhance Survey of the employed and unem-
the employment-generating capacity of the in- ployed in 1999-2000 captured data on
formal economy, but little research is avail- the informal enterprises offering em-
able on the links between the informal ployment, as well as on members of
and formal segments of the economy. sample households and their status
Indicators and statistical systems are yet separately in informal and formal sec-
to be evolved on the diverse attributes tor employment. The present study
of the informal economy. has re-tabulated this household-level
data and tested the conceptual frame-
‘Employment in the informal sector’
work on informal employment as per
may be defined as all jobs in informal sec-
these definitions.
tor enterprises or all persons who are employed
in a main or secondary job in at least one in- The study has introduced some addi-
formal sector unit during a given reference tional definitions to identify the type of
period. There is, however, a growing households. Accordingly, it has assigned
segment of workers world-wide who codes that apply to, for example, house-
derive informal employment from the holds sustaining on employment in in-
formal sector, yet cannot be said to have formal sector, on self-employment in
‘formal’ jobs. This ‘informalisation’ of informal sector or on regular salaried/
employment has now led to a wider defi- wage employment in informal sector in
nition that takes into account the total urban India, female-headed households
1
sustaining on employment in informal nature of their jobs, the periodicity of
sector, self-employment in manufactur- their employment or even lack of ad-
ing or trade, etc. equate skills and literacy to rise above
An important indicator of the activity their present situation.
pattern of members of a household is The fact is that the minuscule percent-
the nature and type of work from which age of those constituting the formal
the household derives its major income. sector draw heavily on the labour of
The second component of the present casual and informal workers to sustain
study is an analysis of the linkages per- their own livelihoods and life-styles.
taining to ‘employment in informal sec- The existence of slums in the proxim-
tor’ with gender, consumption spending ity of affluent residential clusters and
and household poverty levels of work- industrial establishments is only one
ers deriving employment from the infor- manifestation of this phenomenon. The
mal sector. country’s formal sector to date does not
offer employment to even one among
The Ground Reality four workers, male or female, in rural
A common perception is that a higher or urban areas.
percentage of people working in the in-
Some Insights
formal sector are poor; nevertheless, it
is the informal sector which offers em- The exercise threw up several interest-
ployment opportunities keeping large ing insights on gender and rural-urban
numbers of households out of absolute differentials, a few of which are high-
poverty and as many others above the lighted here.
poverty line. The same holds true for z 92 percent of all workers were in in-
women working in the informal sector formal employment, covering 90 per-
as well. A large number of poor women cent of the total male workforce and
work in order to keep their households 95 percent of the total female
going and the informal sector offers workforce
them opportunity not as plentifully avail- z A higher proportion of females were
able in the formal sector. engaged in informal employment vis-
Another widely held perception relates à-vis male workers
to the economic well-being of the z Informal employment constituted 96
masses – that the standard of living in percent of total jobs in rural areas,
India has gone up in the last few de- where female informal employment
cades, that there is more widespread was 98 percent compared to 95 per-
employment and that incomes are now cent of male informal employment
more evenly distributed. This study in- z 79 percent of total jobs in urban In-
dicates that this may be more of a sta- dia were of an informal nature, with
tistical illusion. It identifies large groups 82 percent of total female workers
of the employed who continue to en- engaged in informal employment
dure low income levels and high inten- compared to 78 percent among urban
sity of poverty, whether owing to the male workers
2 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

z The gender differential in the infor- It is difficult to envisage employment
mal sector was less pronounced in being generated on such a large scale in
urban non-agricultural economic ac- the formal sector in the country in the
tivities that afforded better opportu- foreseeable future. Nevertheless, every
nities for formal jobs effort should be made to provide qual-
Besides, the incidence of poverty is seen ity employment for educated youth, and
to be much larger than the incidence of to integrate the informal sector into the
unemployment. Also, poverty is related mainstream of economic activities. This
more to the nature of employment (self-em- can be done only by providing space and
ployment, regular wage/salaried employment facilities for such activities as well as
or casual wage employment) than to the abso- an enabling environment that helps to
lute rate of employment. upgrade the productivity of workers in
the informal sector.
Data on similar lines in rural and urban
areas for 16 major Indian states have also The literacy levels of workers no doubt
been obtained from the National Sample play an important role in their capabil-
Survey. Considerable inter-state varia- ity to absorb higher skills. This, in turn,
tion in the incidence and intensity of enhances their earning capacity and
poverty was observed among different naturally leads to a lower incidence of
types of households, separately in rural poverty in households sustaining on
and urban areas. Yet, success stories in a employment in the informal sector.
number of States lend hope that the right The links among ‘employment in infor-
policy framework focusing on issues pe- mal sector’, ‘poverty’ and ‘gender’, as
culiar to a State or region can alleviate explored in this study are complex in-
the woes of the poor and very poor. deed, and call for careful analytical
scrutiny. The gender analysis of pov-
Observations erty should not be so much about
The study indicates that self-employed whether women suffer more from pov-
workers in urban areas tend to perform erty than men. Rather, it ought to re-
somewhat better when seen in terms of volve about how gender differentiates the
average earnings than casual workers. social processes leading to poverty, and the
The existence of the informal sector in possible escape routes out of such des-
urban India has to a large extent made titution. An understanding of the
it possible for a sizeable proportion of causal processes leading to poverty has
workers to sustain themselves through important policy implications. It raises
self-employment. Against such a back- critical questions about whether it is
drop, the approach and policies towards right to assume, as is often done, that
the informal sector acquire unique sig- the kinds of policies and asset inter-
nificance. All the unemployed need not ventions which can strengthen the po-
necessarily be poor, but for the poor the sition of poor men will have much the
only solution to poverty lies in employment same impact on the economic status of
avenues offering reasonable income. poor women as well.
Executive Summary 3
Recommendations of poor households in both rural (mostly
agricultural) and urban India. This category
Policy-makers, statisticians as well as
of workers faces seasonal non-availabil-
economists continue to work on evolv-
ity of work, leading to low income and
ing means for raising income levels of
high incidence of poverty. Policy interven-
the poorer sections of the workforce,
tions are required to
who are critically dependent for their
livelihood on employment opportunities z provide more gainful employment to
in the informal sector. There is scope the deprived sections of society
for examining more closely how the poor z create more employment opportu-
in informal employment can enhance nities for women, especially in pub-
their earnings, whether women from lic works – both in the rural and
poor households are more likely to take urban areas
up work in the informal sector and if z raise the literacy levels among the
their income helps keep down poverty poorer households and
levels. There is also need to evolve z evolve training methodologies suited
policy formulations appreciating the as- to their levels of understanding
pirations of the poor and aimed at cre-
It is only by equipping the workers,
ating the means to meet those with a
whose work does not come under a for-
more diversified employment environment. mal legal framework, with the ability to
An urgent task at hand is a focus on creat- rise above ignorance and deprivation
ing additional work opportunities for ca- that policies can effectively bring about
sual workers, who constitute the majority a qualitative change in their lives.

SECTION I
Introduction
Conceptual Framework ties went unrecorded in the public do-

main has been ascribed to the inability of
In Indian National Accounts Statistics,
other sectors of the economy to provide adequate
the ‘unorganised’ segment of the
income or employment opportunities to a rap-
economy refers to all operating units
idly growing labour force. Though widely
whose activities are not regulated un-
used now, the precise meaning and defi-
der any statutory Act or legal provision
nition of the term ‘informal sector’ has
and/or those which do not maintain any
remained somewhat elusive.
regular accounts. More than 60 percent
of the national income is generated in After much deliberation (see Annexure)
the unorganised segment. The unorganised over a number of years and incorporat-
segment of the economy in India is larger than ing significant inputs from the Delhi
and inclusive of the informal economy. It must Group3, ‘employment in the informal
be recognised here that India has wid- sector’ has come to be defined interna-
ened and improved its data base on the tionally as including all jobs in informal
unorganised sector for more than 25 sector enterprises or all persons who, during a
years now, a major achievement among given reference period, were employed in at least
developing nations.1 one informal sector enterprise irrespective of
their status in employment and whether it was
The International Context their main or a secondary job.
At the international level, the concept of The term ‘enterprise’, as used here, is
the ‘informal sector’ has been one of the to be understood in a broad sense, re-
most distinctive contributions of Inter- ferring to any unit engaged in the production
national Labour Office (ILO)2 to devel- of goods or services for sale or barter. It cov-
opment thinking. The phenomenon of ers not only production units, which em-
‘working poor’ whose economic activi- ploy hired labour, but also production
1
In fact, Professor P.C. Mahalonobis, founder of the Indian National Sample Survey (NSS), organised collection
of data on ‘household enterprises’ in the very first round (October 1950-March 1951) of NSS. Since then,
the experience of NSS has been spread over nearly four decades (1950-56, 1958-60, 1964-65, 1968-70,
1974-75, 1978-81, 1983-86, 1988-2002) in the collection, processing and analyses of data on enterprises
forming part of the informal economy. The Indian experience on building up a data base relevant to the
informal economy is thus quite extensive and rich among the developing nations of the world.
2
The term ‘informal sector’ first appeared in an official document in the ILO report of a comprehensive
employment mission to Kenya in 1972. It found that, in a developing country like Kenya, the main employment
problem was not unemployment, but the existence of a large number of ‘working poor’, many of them
working very hard in the production of goods and services but whose activities were not recognised,
recorded, protected or regulated by the public authorities.
3
‘Expert Group on Informal Sector Statistics’, set up by the United Nations Statistical Commission under the
Chairmanship of Secretary (Statistics), Government of India; 1997.
5
units that are owned and operated by z explore the informal employment-
single individuals working on their own poverty-gender relationship
account as self-employed persons, either are crucial to promote any meaningful,
alone or with the help of unpaid family policy-oriented research on the infor-
members. The activities may be under-
mal economy.
taken inside or outside the enterprise
owner’s home, and they may be carried Relevance of Informal Economy
out in identifiable premises, unidentifi- A recent Planning Commission report4
able premises or without fixed location. has clearly emphasised the policy rel-
Accordingly, self-employed street ven- evance of the informal economy in In-
dors, taxi drivers, home-based workers, dia. In 1999-2000, the contribution of
etc., are all considered enterprises. formal employment to total employ-
The conceptual framework proposed by ment was only 8 percent and the remain-
ILO aims at broadening the enterprise-based ing 92 percent came from informal em-
concept of employment in the informal sector ployment. Even if the organised sector
by relating it in a consistent manner with a grows at 20 percent per annum and the
job-based concept of informal employment. private organised sector grows at 30
percent per annum, their contribution to
The Indian Scenario
aggregate employment will increase by
The situation in India is that a very hardly 1.5-2 percent of the total over
large proportion of the workforce is in the Tenth Plan period (2002-07).
the informal economy. Without an ap-
This proportion, however, remains hy-
propriate policy environment, it is dif-
pothetical since this high growth (the
ficult for the benefits of economic
capital-intensity in this sector is now
growth to reach these categories of
above 5.5) will not be sustainable due
workers. It is, therefore, essential to
to the saving/investment constraint of
continuously improve statistics and
the economy. On the basis of this ground
develop and disseminate appropriate
reality, the Planning Commission report
statistical indicators on the size, com-
concluded that for generating the desir-
position and contribution of the infor-
able high level of employment, there was
mal economy. The links between the
need to target the unorganised sector
infor mal and formal parts of the
(which largely belongs to informal
economy are not well researched.
economy) exclusively.
It is in this context that statistical stud-
ies relating to the informal economy in Informal Employment &
India in general and, in particular, to Employment in Informal
z analyse the components of total em-
Sector
ployment into formal and informal One of the components of the present
employment according to status in study is to operationalise the concept of
employment and ‘informal employment’ as distinct from
4
Report of the Special Group on “Targeting Ten Million Employment Opportunities per year over the Tenth
Plan Period”; Planning Commission, Government of India; May 2002.

‘employment in informal sector enter- also collected – through an abridged
prises’ by undertaking detailed tabula- worksheet – on the consumption expen-
tion and analysis of household level data diture of the household to which the
collected in the survey. Such a study has worker belonged. Another critical com-
become possible because the National ponent has been a study involving analy-
Sample Survey Organisation (NSSO) ses that link data on employment in the
included for the first time in 1999-20005 informal sector with the gender of the
certain probing questions to usual sta- workers, consumption expenditure and
tus workers on some specific features poverty levels of households sustaining
of the enterprises in which they worked on employment in the informal sector.
in its labour force survey. This is, once again, an offshoot of the
recommendation of the Delhi Group
The survey was so planned and executed
that “Countries undertaking combined
that it was possible to identify the mem-
labour force and expenditure surveys
bers of the household who were em-
may undertake further research to evolve
ployed (including their status in employ-
methodologies for linking poverty esti-
ment as self-employed: own account
mates and informal sector employ-
worker, employer, unpaid family
ment”.
worker; employee: regular salary/wage
earner, casual employee) as usual status Research Areas
workers separately in informal and for- Links among ‘employment in informal
mal sector enterprises. Separate identi- sector’, ‘poverty’ and ‘gender’ have been
fication of paid domestic workers em- attracting serious attention from deci-
ployed by households was also possible. sion-makers, thinkers and academicians
Definitions and methodologies adopted who would like to believe that
in the survey and used extensively for
z the link between poverty and eco-
the purposes of the study have been dis-
nomic growth is employment,
cussed in Section II.
z the livelihood of the vast majority of
In view of these specific features of the the workforce in developing countries
survey, household level data dissemi- cr ucially depends on infor mal
nated by NSS on electronic media can economy, and
be used for re-tabulation and testing of
z support for work of women will, in
the conceptual framework on informal
effect, lead to support for poor house-
employment proposed by ILO. This has
holds.
been done in the present study and the
results are reported in Section III. In this context, specific research ques-
tions are:
Employment in Informal z Does a higher proportion of the poor
Sector, Poverty & Gender participate in the informal sector?
In addition to the specific features of z Are households depending on the in-
the survey mentioned above, data was formal sector more likely to be poor?
5
55th Round of Indian National Sample Survey on labour force, employment and unemployment; 1999-2000.
Introduction 7
z Are women in poor households Perceptions: An Overview
more likely to work in the infor- Some of the perceptions of links be-
mal sector? tween poverty and informal economy are:
z Does income of women employed in z There is an overlap between working
the informal sector, though low, con- in the informal economy and being
tribute to reduction in the level of poor, and a higher percentage of
household poverty? people working in the informal sector,
The relationship between employment relative to the formal sector, are poor
and poverty is not a simple one. In In- z There is no simple relationship between
dia, unemployment rates based on usual working in the informal economy and
status are not high. This is because un- being poor or working in the formal
employment rates are based on a time economy and escaping poverty
criterion. Poor people are too poor to z The relationship between informal
be unemployed for a long time. Instead, employment and the intensity of pov-
we have the concept of ‘working poor’. erty appears only when informal
In other words, many people are work- workers are analysed by status in em-
ing at low wages and low working con- ployment (self-employed, regular sal-
ditions in the agriculture and the non- ary/wage earner, casual worker etc.)
agricultural informal sector. and by sector of industry (manufac-
turing, trade, construction, etc.)
Employment Quality & Income
Levels z The informal sector incomes play a
significant role in keeping many
The real nature of the unemployment households above absolute poverty
problem, thus, is not that people are and keeping other households above
not ‘employed’ in some activity but that the poverty line
a large number of those classified as em-
ployed are engaged in low quality of employ- Some of the perceptions about links
ment, which does not provide adequate in- among gender, informal employment
come to keep a family above the poverty line. and poverty are:
Allowing the poor to contribute to and z There is a significant overlap between
benefit from increased economic being a woman, working in the infor-
growth rates will pose particular chal- mal economy, and being poor:
lenges, as employment in India is largely z Women in poor households are more
informal. It will be necessary to ensure likely to work in the informal sec-

that government policy and program- tor than men in poor households or
mes recognise the perceptions and pri- women in non-poor households.
orities of the poor, improve productiv- z Women who head households are
ity and create diversified employment more likely to be in the informal sec-
opportunities to earn income. tor than men who head households.

z Female-headed households are more z Women’s income from informal em-
likely to be poor than male-headed ployment, though low, contributes to
households a reduction in the level of household
z There is no simple relationship, how- poverty, especially among the poor-
ever, between being a woman, work- est households
ing in the informal economy, and be-
All these perceptions require testing
ing poor
based on analysis of reliable data in any
z The relationship between female in- particular country.
formal employment and the intensity
of female poverty appears only when The above context, it is hoped, brings
female infor mal employment is out the importance and critical nature
analysed by status in employment of the second component of the present
(self-employed, regular salary/wage study, the results of which are reported
earner, casual worker, etc.) in Section IV.
Introduction 9
SECTION II
Methodology & Definitions
Framework z Informal sector enterprises comprise

A person can simultaneously have two units engaged in the production of
or more formal and/or informal jobs. In goods or services for sale or barter, in-
view of such multiple job-holding, jobs cluding those run by self-employed in-
– rather than employed persons – have dividuals, and even street vendors, etc
been taken as the observation units for z Households as production units in-
employment. Employed persons hold jobs clude households producing goods
that can be described by various job-re- exclusively for their own final use (e.g.
lated characteristics, and these jobs are subsistence farming, do-it-yourself
undertaken in production units (enter- construction of own dwellings), as
prises) that can be described by various well as households employing paid
enterprise-related characteristics. Thus, domestic workers (maids, laundresses,
the framework disaggregates total em- gardeners, watchmen, drivers, etc.).
ployment according to two dimensions: The international definition of the in-
type of production unit and type of job (see formal sector excludes households pro-
matrix in Figure 1). ducing goods exclusively for their own
Type of production unit is defined in final use, but provides an option to in-
terms of legal organisation and other clude households employing paid do-
enterprise-related characteristics, while mestic workers. The framework pre-
type of job is defined in terms of status sented here does not use this option and,
in employment and other job-related hence, excludes households employing
characteristics. paid domestic workers from the infor-
mal sector. Households producing un-
Production Units
paid domestic or personal services (e.g.,
Production units are classified into three housework, caring for family members)
groups: Formal sector enterprises, infor- for own final consumption are excluded,
mal sector enterprises and households. as such activities fall outside the present
z Formal sector enterprises comprise cor- System of National Accounts (SNA)
porations (including quasi-corporate production purview (see Annexure) and
enterprises), unincorporated enterprises are not regarded as employment.
owned by government units, non-profit
Job Categories
institutions and private unincorporated
enterprises producing goods or services Jobs are distinguished according to sta-
for sale or barter which are not part of tus-in-employment categories and as
the informal sector per their formal or informal nature. For

status in employment, the following separated from the type of enterprise
five groups of the International Clas- which they own. The informal nature
sification of Status in Employment of their jobs thus follows from the
(ICSE-93) have been used: characteristics of the enterprise.
z Own-account workers z Contributing family workers, irrespec-
z Employers tive of whether they work in formal
z Contributing family workers or informal sector enterprises (Cells 1
& 5). The informal nature of their jobs
z Employees and
stems from the fact that contributing
z Members of producers’ cooperatives family workers usually have no ex-
Such a breakdown by status in employ- plicit, written contracts of employ-
ment was considered useful for policy ment, and that usually their employ-
purposes (Figure 1). ment is not subject to labour legisla-
Informal employment comprises the fol- tion, social security regulations, collec-
lowing types of jobs: tive agreements, etc. (family workers
z Own-account workers and employers with a contract of employment and/
who have their own informal sector or wage are considered employees).
enterprises (Cells 3 & 4). Their em- z Employees who have informal jobs,
ployment situation can hardly be whether employed by formal sector
Figure 1: Conceptual Framework – Informal employment
Production Jobs by status in employment

unit by type Own-account Employers Contributing Employees Members of
workers family workers producers’
cooperatives
Informal Formal Informal Formal Informal Informal Formal Informal Formal
Formal sector NE NR NE NR 1 2 NR NE NR
units
Informal sector
3 NE 4 NE 5 6 NR 7 8 NE
units*
Households ** 9 NE NE NE NE 10 NR NE NE
*As defined by 15th ICLS (excluding households employing paid domestic workers)
**Households producing goods exclusively for their own final use & households employing paid domestic workers
NE: Not existing. NR: Not relevant to informal employment.
• NE – jobs that by definition do not exist in the type of production unit in question, e.g. there cannot be contributing family workers in
household non-market production units.
• NR – jobs found in the type of production unit in question, but which are not relevant to informal employment, e.g. own-account workers and
employers owning formal sector enterprises, employees with formal jobs in formal sector enterprises or members of formally established
producers’ cooperatives.
• The remaining Cells – types of jobs that represent different segments of informal employment.
Each of these Cells can and should be further disaggregated in order to identify specific types of jobs or production units for further analysis and
policy-making.
Methodology & Definitions 11

enterprises, informal sector enterprises Cell 7 refers to employees working in
or as paid domestic workers by house- informal sector enterprises, but having
holds (Cells 2, 6 & 10) are considered formal jobs. Such cases may occur
to have informal jobs if their employ- when enterprises are defined as infor-
ment relationship is not subject to stan- mal in using size as the only criterion,
dard labour legislation, taxation, social or where there is no administrative link
protection or entitlement to certain between the registration of employees
employment benefits (advance notice and that of their employers. However,
of dismissal, severance pay, paid an- the number of such employees is small
nual or sick leave, etc.) because of non- in most countries.
declaration of the jobs or employees
‘Informal employment’ encompasses the
(e.g. clandestine workers, illegal immi-
sum of Cells 1 to 6 and 8 to 10. The
grant workers); casual jobs or jobs of a
sum of Cells 1, 2, 9 and 10 may be called
limited short duration; jobs with hours
informal employment outside the informal sec-
of work or wages below a specified
tor, of which Cell 2 (employees with in-
threshold (e.g. for social security con-
formal jobs, employed by formal sector
tributions); employment by unregis-
enterprises) tends to generate the maxi-
tered enterprises or by persons in
mum interest among researchers, social
households; or jobs where the emplo-
partners and policy makers.
yee’s place of work is outside the pre-
mises of the employer’s or customer’s It may also be noted that ‘employment
enterprise (e.g. outworkers). in informal sector’ excluding the ‘employ-
ees working in informal sector enterprises
The definition corresponds to that of
but having formal jobs’ (Cell 7) form part
unregistered employees adopted by the
of ‘informal employment’.
15th International Conference of Labour
Statisticians (ICLS) (see Annexure). It Countries which do not have statistics
encompasses the ICSE-93 definitions of on employment in the informal sector,
non-regular employees, workers in pre- or for which a distinction by type of
carious employment (casual workers, production unit is not relevant, may use
short-term workers, seasonal workers, an abridged version of the framework,
etc.) and contractors. limiting measurements to the job-based
z Members of informal producers’ co- concept of informal employment. In
operatives (Cell 8). Producers’ coop- such cases, appropriate alternative defi-
eratives that are not formally estab- nitions of informal jobs of own-ac-
lished as legal entities are treated as count workers, employers and members
private unincorporated enterprises of producers’ cooperatives would have
owned by members of several house- to be developed.
holds. They are part of the informal A similar issue in respect of the classifi-
sector if they meet all the criteria of cation of persons in agricultural and re-
the definition. lated activities arises for countries such
‘Employment in the informal sector’ en- as India, which use an informal sector
compasses the sum of Cells 3-8. Here definition that excludes such activities.

Employment Data Collected Identification of each individual into a
in NSS unique situation can pose a problem
when more than one of the three broad
Workers are persons who are engaged
activity statuses listed above are con-
in any economic activity. An activity re-
currently obtained for a person during a
sulting in production of goods and ser-
reference period. In such an eventual-
vices that add value to the national
ity, the identification uniquely under any
product is considered as an economic
one of the three broad activity statuses
activity – production of goods and ser-
is done by adopting either the ‘major
vices for market (market activities) i.e.
time’ or priority criterion.
production for pay or profit, and pro-
duction of primary commodities for own ‘Major Time’ Criterion
consumption and own-account produc-
The ‘major time’ criterion is used for
tion of fixed assets (non-market activi- classification of persons according to
ties). Unpaid helpers assisting in opera- the ‘usual activity status’ approach
tion of an economic activity in the where the reference period is 365 days
household farm or non-farm activities preceding the date of survey. In this
are also considered workers. study we are concerned with only ‘usual
The activity status of a person is defined as the activity status’ because the probing
activity situation in which a person is found questions in the survey were put only
during a reference period with regard to the to ‘usual status’ workers in regard to the
person’s participation in economic and/or non- enterprise in which they worked. The
economic activities. A person could be in one activity status on which a person spent
or a combination of three broad activity relatively longer time (i.e. major time cri-
statuses during a reference period: terion) during the 365 days preceding
the date of survey is considered as the
(i) Working or being engaged in eco-
‘principal usual activity status’ (PS) of
nomic activity (work) as defined
the person.
above,
(ii) Being not engaged in economic ac- To decide the principal usual activity of
tivity (work) but either making tan- a person, he/she is first categorised as
gible efforts to seek ‘work’ or being belonging to the labour force or not dur-
available for ‘work’ if ‘work’ is avail- ing the reference period on the basis of
able and major time criterion. For persons belong-
ing to the labour force, the broad activ-
(iii) Not engaged in any economic activ-
ity status of either ‘working’ or ‘not
ity (work) nor available for ‘work’.
working but seeking and/or available
Activity statuses (i) and (ii) above are for work’ is ascertained based on the
associated with ‘being in labour force’ same criterion, viz. relatively longer time
and the last with ‘not being in the labour spent in accordance with either of the
force’. Within the labour force, statuses two broad statuses within the labour
(i) and (ii) are associated with ‘employ- force during the 365 days preceding the
ment’ and ‘unemployment’, respectively. date of survey.

Within the broad activity status so de- enterprises, working full- or part-time
termined, the detailed activity status of and not receiving any regular salary or
a person pursuing more than one such wages in return for the work performed.
activity is determined once again on the They are not running the household en-
basis of relatively longer time spent on terprise on their own but assist the re-
such activities. lated person living in the same house-
The detailed activity status categories hold in running the enterprise.
under the broad activity status ‘em- Regular salaried/wage employees are persons
ployed’ used in the survey are: working in others’ farm or non-farm en-
z Worked in household enterprise (self- terprises (both household and non-
employed) as own-account worker household) and getting salary or wages
(Code 11) on a regular basis (i.e. not on daily or
periodic renewal of work contract ba-
z Worked in household enterprise (self-
sis) in return. This category included
employed) as employer (Code 12)
not only persons getting time wage but
z Worked as helper (self-employed) in also those receiving piece wage or sal-
household enterprise (unpaid family ary and paid apprentices, full-time and
worker (Code 21) part-time.
z Worked as regular salaried/wage em-
Casual wage labour is a person casually
ployee (Code 31)
engaged in others’ farm or non-farm en-
z Worked as casual wage labour in pub- terprise (both household and non-house-
lic works (Code 41) hold) and, in return, receiving wages ac-
z Worked as casual wage labour in other cording to the terms of the daily or pe-
types of work (Code 51) riodic work contract.
Own-account workers are those self-em- A person whose principal usual status (PS)
ployed persons who operated their en- is determined on the basis of the major
terprises on their own account or with time criterion could have pursued some
one or a few partners and who, during economic activity for a relatively shorter
the reference period, by and large, ran time (minor time) during the reference
their enterprise without hiring any period of 365 days preceding the date
labour. They could, however, have had of survey. The status in which such eco-
unpaid helpers to assist them in the en- nomic activity is pursued is the subsid-
terprise. iary economic activity status (SS) of that per-
Employers are those self-employed person. Thus, activity status Codes 11-51
sons who worked on their own account are only applicable to persons reporting
or with one or a few partners and, some subsidiary economic activity.
who, by and large, run their unit by Engagement in work in subsidiary ca-
hiring labour. pacity could arise out of the following
Helpers in household enterprises are those two situations, viz.
self-employed persons (mostly family z A person could be engaged for a rela-
members) engaged in their household tively longer period during the last

365 days in one economic/non-eco- usually engaged in either principal or
nomic activity and for a relatively subsidiary status. Thus, data were col-
shorter period in another economic lected on these features of such enter-
activity, and prises for household members working
z A person could be pursuing one eco- in industries with two-digit divisions 10
nomic activity/non-economic activ- to 99 covering the non-agricultural sec-
ity almost throughout the year in the tor as stated below:
principal usual activity status and si- The type of enterprise where household
multaneously pursuing another eco- members worked was categorised as
nomic activity for a relatively shorter
(i) Proprietary (male)
period in a subsidiary capacity.
(ii) Proprietary (female)
Classification of Industries & (iii) Partnership with members from
Occupations same household
Description of the industry-occupation (iv) Partnership with members from
is relevant to the type of economic ac- different households
tivity pursued by the person. The Na-
(v) Public sector enterprise
tional Industrial Classification-1998 has
been followed for classifying industries (vi) Semi-public enterprise
and National Classification of Occupa- (vii) Others and
tions-1968 for classifying occupations. (viii) Not known.
In case two or more industry-occupa-
tion combinations corresponding to the Information was recorded under cat-
status code were reported by a person, egory (vii) if the informant was unable
the principal industry-occupation was to identify the type of enterprise in
taken as the one in which relatively more which a household member worked and
time was spent during the reference pe- the investigator was unable to collect
riod by the person. such information in spite of his/her
best efforts. Definitions of enterprise
Six additional codes have been intro- types used in the survey are stated in
duced for recording five-digit entries the following:
for industry codes in the survey, viz.,
z Proprietary: An individual (male or fe-
housemaid or servant (95001), cook
male) who is sole owner of enterprise
(95002), gardener (95003), gatekeeper,
chowkidar or watchman (95004), gov- z Partnership: Describing the relation be-
erness or baby-sitter (95005) and oth- tween persons who have agreed to
ers (95009). share the profits of a business carried
on by all or any one of them acting for
Non-agricultural Enterprises all. There may be two or more own-
The 1999-2000 survey attempted to ers, belonging to the same or different
gather data on certain particulars of households, on a partnership basis,
non-agricultural enterprises in which with or without formal registration
members of sample households were (where there is a tacit understanding

about the distribution of profit among on status of working under given speci-
the so-called partners). fications, status of source providing
z Public Sector Enterprise: Wholly owned/ credit/raw material/equipment, number
run/managed by central or state gov- of outlets of disposal, basis of payment
ernments, quasi-government institu- and type of specifications.
tions, local bodies like universities,
The Informal Sector
education boards, municipalities, etc.,
but not run on a loan granted by gov- In the survey, non-agricultural private
ernment, local body, etc. unincorporated enterprises comprising
z Semi-public Sector Enterprise: An enter- the proprietary and partnership groups
prise in which, besides private share- of enterprises defined above consti-
holders, government (central/state/ tuted the informal sector of enterprises.
local bodies, etc.) also held some No other feature of such enterprises was
shares, irrespective of who held the taken into consideration in defining the
majority of shares. informal sector, nor were agricultural en-
terprises.
z Others: Any other type of enterprise,
other than those covered above. Such Activity Status
enterprises included cooperative so-
In the survey, certain follow-up ques-
cieties, public limited companies,
tions on availability for work were put
other units covered under Annual Sur-
to persons working in the usual principal
vey of Industries (ASI) and institu-
or subsidiary activity status (in respect
tional enterprises other than those
of agriculture as well as non-agricultural
described above and managed by pub-
industries) to understand the extent of
lic trusts or societies (other than co-
under-utilisation of labour time and to
operative societies), training school/
acquire more specific information. An
institutions, etc.
effort was also made to collect informa-
(Note that cooperatives were not iden- tion on the qualitative aspects of their
tified separately. Households producing employment, like nature of job, availabil-
goods exclusively for their own final use ity of trade unions/associations, etc.; e.g.
were also not identified separately and whether the person was engaged mostly
possibly these were included in the cat- in full-time or part-time work during last
egory ‘enterprises not known’). 365 days. According to the principal usual
The other features collected for non-ag- status approach, the broad activities cat-
ricultural enterprises (in which members egory has been determined on the basis
of the major time criterion. Thus, per-
of household worked) were status of
sons ‘employed’ in their principal status
maintenance of written accounts, loca-
may or may not be employed throughout
tion of work place, number of workers,
the last 365 days.
and status of use of electricity (for manu-
facturing enterprises only). For enterprises By virtue of the procedure adopted for
run by non-agricultural self-employed classification of activity statuses, it is
workers, information was also collected possible that some of them were not

employed for considerable lengths of (ii) Proprietary (female) – Code 2
time. In the case of those who were (iii) Partnership with members from
employed only in the subsidiary sta- same household – Code 3 and
tus, this would be the situation most (iv) Partnership with members from
often. So, questions like the following different households – Code 4.
were asked:
z Formal sector enterprises consisting
z Whether the person worked more or of the enterprise types:
less regularly during the last 365
(i) Public sector – Code 5
days; also
(ii) Semi-public – Code 6
z whether a worker sought/was avail-
(iii)Others (e.g. cooperative society,
able for additional work (during the
public limited company, private
days he/she had work) on most days
limited company and units under
or on some days or on no day and
Annual Survey of Industries us-
z whether a worker sought/was avail-
ing the provisions of ‘Collection
able for alternative work (during the
of Statistics Act’) – Code 7.
days he/she had work) on most days
or on some days or on no day. Own-account Workers
z Whether the nature of employment Households producing goods exclusively
was permanent (i.e. in normal course for their own final use were not identi-
likely to continue in the same employ- fied separately in the survey, although
ment) or temporary. among the non-market activities, produc-
z In the case of regular salaried or wage tion of primary commodities for own
employees whether they were cov- consumption and own-account produc-
ered under any provident fund (social tion of fixed assets were included in eco-
security indicator) or not. nomic activities. Possibly, many of the
These questions are useful in characte- own-account workers recorded under en-
rising the formal or informal nature of terprise type ‘not known – Code 9’ be-
the work for those working in agricul- longed to such households.
tural or non-agricultural activities. This estimate of own-account workers
under ‘not known – Code 9’ enterprise
Classifying Informal Sector could provide an upper bound for own-
Enterprises account workers belonging to house-
Applying the ILO conceptual frame- holds engaged in production of primary
work on informal employment to em- commodities for own consumption and
ployment data available from 1999-2000 own-account production of fixed assets.
NSS, it becomes clear that in the Indian Data on paid domestic workers (infor-
situation production units in non-agri- mal employees) employed by ‘house-
cultural sector can be classified into: holds’ were recorded under industry di-
z Informal sector enterprises compris- vision 95 of National Industrial Classi-
ing enterprise types: fication of 1998: ‘Private households
(i) Proprietary (male) – Code 1 with employed persons’.

Although ‘households’ as a type of pro- – Code 41, casual wage labourer in
duction unit was not identified sepa- other types of work – Code 51.
rately in the 1999-2000 survey under No separate identification was available
‘enterprise type’ codes, data in regard to for ‘members of producers’ coopera-
‘own-account workers in households tives’. This category of workers would
producing goods exclusively for their have been recorded:
own final use’ and ‘informal employees
z Under enterprise Code 7 and own-ac-
working as paid domestic workers in
count worker Code 11 or employer
households’, could be generated to the
Code 12, if the cooperatives were es-
extent indicated above.
tablished as legal entities and belonged
Status in Employment to formal sector enterprises; and
As regards classification of jobs by sta- z Under enterprise Code 4 and own-
tus in employment, in the 1999-2000 account worker Code 11 or employer
Indian survey separate identification Code 12 if the cooperatives were pri-
was available for: vate unincorporated enterprises
(i) Own-account worker – Code 11 owned by members of several house-
(ii) Employer – Code 12 holds and formed part of informal sec-
tor enterprises.
(iii) Unpaid family worker – Code 21,
and It was thus considered appropriate to
(iv) Employee categories: regular sala- devise a conceptual framework outlined
ried/wage employee – Code 31, ca- in Figure 2, which is an abridged ver-
sual wage labourer in public works sion of the framework proposed by ILO.
Figure 2 : Non-agricultural usual status principal and subsidiary workers reporting enterprise type
Production Jobs by status in employment

unit by type Own-account Employers Contributing Employees
workers family workers
Informal Formal Informal Formal Informal Informal Formal
Formal sector
NE (a) NE (b) (c) (d) (e)
enter-prises
Informal sector
(f) NE (g) NE (h) (i) (j)
enter-prises
NE: Not Existing
In the framework above, the Cells are defined as
(a) status in employment Code 11 and enterprise (f) status in employment Code 11 and enterprise
type Codes (5 + 6 + 7) type Codes (1 + 2 + 3 + 4)
(b) status in employment Code 12 and enterprise (g) status in employment Code 12 and enterprise
(c) status in employment Code 21 and enterprise (h) status in employment Code 21 and enterprise
(d) as explained below (i) as explained below
(e) as explained below (j) as explained below.

‘Informal’ Employees in Formal ‘Formal’ Employees in Formal
Sector Enterprises Enterprises
All casual wage labourers employed in A regular salaried/wage employee (Code
public works (Code 41) are engaged in 31) working in the enterprise types
works organised by public authorities (Codes 5 + 6 + 7) and satisfying all the
and therefore have informal jobs in for- following criteria
mal sector enterprises. All casual wage (a) full-time
labourers engaged in other types of
(b) permanent (in normal course likely
work (Code 51) in enterprise types to continue in same employment)
(Codes 5 + 6 + 7) also have informal and
jobs in formal sector enterprises.
(c) covered under provident fund (so-
A regular salaried/wage employee (Code cial security indicator)
31) working in enterprise types (Codes
is considered to be a ‘formal employee’
5 + 6 + 7) and satisfying any one of the
in a formal sector enterprise. Such em-
following criteria
ployees constitute Cell (e) of the frame-
(a) part-time work given above.
(b) temporary (in normal course not
We may write down the description in
likely to continue in the same em-
the following manner:
ployment) or
Status in employment Code 31 and en-
(c) not covered under provident fund
terprise type Codes (5 + 6 + 7) and
(social security indicator)
also (a), (b) permanent and (c) as de-
is also considered to be an ‘informal’ scribed above.
employee in formal sector enterprise.
Informal employees in informal
All the above employees, as described sector enterprises
here, are treated as having informal jobs
in formal sector enterprises. In short, the These could thus be described as consti-
description of informal employees in tuting Cell (i) of the framework as follows:
formal sector enterprises, constituting Status in employment Code 51 and en-
Cell (d) in the framework given above, terprises type Codes (1 + 2 + 3 + 4);
can be put down as follows: Status in employment Code 31 and en-
Status in employment Code 41; terprise type Codes (1 + 2 + 3 + 4) and
Status in employment Code 51 and en- (a) part-time, (b) temporary or (c) not
terprise type Codes (5+6+7); covered under provident fund.
Status in employment Code 31 and en- Formal employees in informal
terprise type Codes (5+6+7) and sector enterprises
(a) part-time or These would constitute Cell (j):
(b) temporary or Status in employment Code 31 and en-
(c) not covered under provident fund. terprise type Codes (1 + 2 + 3 + 4) and

also (a) full-time, (b) permanent and (c) From total workers in agriculture, informal em-
covered under provident fund. ployment estimated as above is subtracted to ob-
tain formal employment as a residual component.
It may be noted that the framework
given above can be used for working out Defining Households
informal employment separately in
manufacturing or construction, or trade In the present study, we need certain
or any other non-agricultural industry. additional definitions for identifying the
type of households. We introduce a new
Informal Employment in definition of a ‘household sustaining on
Agriculture employment in informal sector’ as a
In the case of usual principal and sub- household having at least one usual principal
sidiary status workers engaged in agri- status worker in the informal sector and no
culture (and related activities), no en- usual principal status worker outside the in-
terprise type was recorded. Without formal sector.
reference to any enterprise type in z A ‘household sustaining on self-em-
which the worker is engaged, workers ployment in informal sector’ is de-
constituting the category of ‘informal fined as a household sustaining on
employment’ in agriculture are defined employment in the informal sector
as follows: and whose household type code is (a)
self-employed in non-agriculture in
(a) All own-account workers (status in
rural areas and (b) self-employed in
employment Code 11)
urban areas.
(b) All casual wage labourers (status in
z A ‘household sustaining on regular
employment Code 51)
salaried/wage employment in informal
(c) All unpaid family workers (status in sector in urban India’ is defined as a
employment Code 21) household sustaining on employment
(d) Regular salaried/wage employee in the informal sector and whose
(status in employment Code 31) and household type code is ‘regular salary/
(i) part-time, or (ii) temporary, or (iii) wage earning’ in urban areas.
not covered under provident fund z A ‘household sustaining on casual
(e) Employers (status in employment wage employment in informal sec-
Code 12) and (i) approximate num- tor in urban India’ is defined as a
ber of months without work: one or household sustaining on employment
more and sought/was available for in informal sector and whose house-
work during those months on most hold type code is ‘casual labour’ in
days or (ii) sought/was available for urban areas.
additional work on most days dur- z A ‘female-headed household sustain-
ing the days he/she had work or ing on employment in informal sec-
(iii) sought/was available for alter- tor’ is defined as a household sustain-
native work on most days during the ing on employment in informal sec-
days he/she had work. tor whose head is a female.

z A ‘household sustaining on employ- consumption expenditure are specified
ment in informal manufacturing sec- in detail over 15 pages to minimise re-
tor’ is defined as a household having call lapse on the part of respondents.
at least one usual principal status
worker in informal manufacturing sec- NSS & Poverty Estimates
tor and no usual principal status The proportion of the population be-
worker outside informal manufactur- low the specified poverty line (or head
ing sector. count ratio) is officially recognised as
Other definitions as given in the preced- ‘poverty estimate’, when the distribution
ing paragraph are also used for informal of persons by MPCE is based on the
manufacturing sector. Similar definitions CES data.
are also possible for construction and z Persons with consumption (MPCE)
trade. Making use of these additional less than the poverty line are defined
definitions and the micro data at house- as ‘poor’.
hold level available from the 1999-2000 z Those with consumption less than
survey of NSS, a set of tables has been three-fourths (or 75 percent) of
specially generated by the NSSO for the the poverty line are defined as
present study. ‘very poor’.
Measuring Poverty z Persons with consumption less than

the poverty line but not ‘very poor’
Poverty is officially estimated in India are termed ‘moderately poor’.
on the basis of one measure, namely,
proportion of the population below an Household Consumer
exogenously specified poverty line. For Expenditure
a household, monthly per capita con- The 1999-2000 Employment and Unem-
sumer expenditure (MPCE) is its total
ployment Survey (EUES) schedule in-
consumer expenditure over a period of cluded an abridged one-page worksheet,
30 days divided by the number of mem- in which 32 different groups of items of
bers in the household (size). A person’s
consumption were specified and house-
MPCE is understood as that of the hold consumer expenditure data on each
household to which he or she belongs. of these 32 item groups were collected.
The Planning Commission, which offi- Considering the sizes of the schedules
cially estimates the incidence of pov- in the CES and EUES, it was thought
erty based on NSS household Consumer that it would be very difficult to obtain
Expenditure Survey (CES) data, has information for both the schedules from
stated that in 1999-2000, the all-India the same household taking into account
poverty line corresponded to the MPCE the fatigue of the respondent. Therefore,
level of Rs. 327.56 in rural areas and unlike in earlier CES and EUES of
Rs. 454.11 in urban areas6.
NSSO, the CES and EUES schedules in
The CES contained, as usual, a detailed 1999-2000 were canvassed in separate
schedule wherein around 330 items of sets of sample households.
6
Press Note dated 22.2.2001
That is why the EUES schedule con- A Different Perspective
tained in the worksheet was considered Based on EUES, Sundaram and
adequate, since MPCE of the household Tendulkar (2001)7 estimated all-India
here was merely a classification variable level poverty ratios of 36.45 percent
for tabulation of employment character- in rural areas and 28.76 percent in ur-
istics and not the main subject of en- ban areas. Using the household level
quiry. However, the household report- micro data set of EUES and pub-
ing of consumer expenditure in an lished CES results, they found that if
abridged schedule is known to be af- the understatement arising from the
fected by a greater degree of recall lapse abridged worksheet used for consump-
than in a detailed schedule and hence tion expenditure recording in the
would tend to understate the total con- EUES schedule was adjusted for the
sumer expenditure in comparison with distribution of persons by MPCE and
that based on a detailed schedule. This the poverty estimates were made on
downward bias may be expected to shift the basis of such an adjusted distri-
the distribution of persons by MPCE bution, then the adjusted poverty es-
based on EUES to the left of that based timates derived from EUES were very
on CES in 1999-2000. close to the official poverty estimates
In fact, published results of the 1999- based on CES, both in the rural and
2000 EUES and CES indicate that the urban areas of India.
cumulative distribution function of
Adjusted Distributions
MPCE based on EUES lies uniformly
above that based on CES at the all-In- The above result provided the requisite
dia level, both in rural and urban areas. confidence that the adjusted distribu-
This suggests that the poverty estimate tions of persons by MPCE in rural as
(head count ratio) based on EUES dis- well as urban India derived from 1999-
tribution of persons by MPCE would be 2000 EUES can be used as yardsticks
higher than that based on CES (which (standards) for obtaining valid and reli-
is the official estimate) and hence, able comparisons and conclusions on
would at best provide only an upper the links between poverty, employment
bound to the comparable official pov- in informal sector and gender. This was
erty estimate in 1999-2000. done in the present study.
7
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.

SECTION III
Estimation of Informal Employment
Informal Employment among though, these proportions were not

Non-agricultural Workers very different for males and females.
Usual status principal and subsidiary Informal employment within the informal
workers in non-agricultural economic sector enterprises constituted the major
activities, who reported the type of en- part of overall informal employment.
terprise in which they worked, were It accounted for
classified according to the abridged ver-
z about 80 percent in rural India
sion of the ILO conceptual framework
by re-tabulating the household level z 70 percent in urban India
data collected in Schedule 10 of the z 74 percent in all areas of India.
1999-2000 NSS. The gender gap for informal employ-
The results at the country level are pre- ment within the informal sector was
sented in Table 3.1 for all the population z 2 percent in rural India (81 percent
segments, i.e. (i) rural males, (ii) rural for females and 79 percent for males
females, (iii) rural persons, (iv) urban in rural areas, 75 percent for males
males, (v) urban females, (vi) urban fe- and 73 percent for males in all areas)
males, (vi) urban persons, (vii) all areas
z 2 percent at all-India levels
(rural + urban): males, (viii) all areas:
females and (ix) all areas: persons. z not discernible (70 percent for both
females and males) in urban India.
Table 3.1 (p.20) shows that a high pro-
portion of non-agricultural workers re- ‘Employment in informal sector’ con-
porting enterprise type, in rural or ur- stituted
ban areas, were engaged in ‘informal z 81 percent in rural India, much larger
employment’. About 87 percent in than
rural areas, 75 percent in urban areas z 73 percent in urban India and
and 80 percent in all (rural + urban) z 76 percent at all-India levels among
areas of India had informal employ- non-agricultural (PS + SS) workers.
ment during 1999-2000 among non-
The gender gap was small or non-existent:
agricultural workers who reported the
type of enterprise in which they z 81 percent for rural males vs 83 per-
worked, with a higher proportion for cent for rural females
females in both rural areas and all ar- z 73 percent for both males and females
eas than for males. In urban areas, in urban India.
23
Table 3.1: Percentage distribution of non-agricultural workers (PS + SS)
reporting enterprise type - 1999-2000
Type of employment Rural India Urban India India (Rural + Urban)
Males Females Persons Males Females Persons Males Females Persons
In Formal Sector
1. Own-account workers
0.4 0.5 0.4 0.3 0.3 0.3 0.3 0.4 0.3
(formal)
2. Employers (formal) 0 0 0 0.1 0 0.1 0.1 0 0
3. Employees (formal) 12.3 7.7 11.4 21.9 21.0 21.8 18.3 15.3 17.8
4. Formal employment
12.7 8.2 11.8 22.3 21.3 22.2 18.7 15.7 18.1
in formal sector
5. Contributing family
0.1 0 0 0 0.1 0 0.1 0.1 0.1
workers (informal)
6. Employees (informal) 6.4 9.3 6.9 5.1 6.1 5.3 5.5 7.5 5.9
7. Informal employment
6.5 9.3 6.9 5.1 6.2 5.3 5.6 7.6 6.0
in informal sector
8. Employment in formal
sector 19.2 17.5 18.7 27.4 27.5 27.5 24.3 23.3 24.1
In Informal Sector
42.2 28.1 39.5 35.2 24.4 33.5 37.9 26.0 35.8
(informal)
10. Employers (informal) 0.7 0.1 0.6 1.5 0.2 1.2 1.2 0.2 1.0
7.1 31.7 11.9 7.8 16.5 9.2 7.5 23.0 10.2
workers (informal)
79.3 81.4 79.8 69.8 69.9 69.8 73.4 74.8 73.6
in informal sector
1.5 1.1 1.5 2.8 2.6 2.7 2.3 1.9 2.3
in informal sector
16. Employment in
80.8 82.5 81.3 72.6 72.5 72.5 75.7 76.7 75.9
informal sector
17. Informal employment 85.8 90.7 86.7 74.9 76.1 75.1 79.0 82.4 79.6
18. Formal employment 14.2 9.3 13.3 25.1 23.9 24.9 21.0 17.6 20.4
19. Total employment 100 100 100 100 100 100 1000 100 100
20. Estimate (in ’000)
of non-agricultural
workers(PS + SS) 48,479 13,448 61,927 66,256 14,087 80,343 114,735 27,535 142,270
reporting enterprise
type

Significantly, the component of infor- higher percentage than male informal
mal employment in formal sector was employees in the rural formal sec-
not less than 5 percent either in rural or tor, urban formal as well as informal
urban areas, as also among male and fe- sectors, while the in the rural infor-
male workers. mal sector male informal employees
As for categories of jobs, own-account formed a significantly higher propor-
workers formed the major chunk of in- tion than female informal employees.
formal employment among rural males Employers as a component of infor-
(42 percent), rural persons (40 percent), mal employment recorded low per-
urban males (35 percent), urban persons centages in all segments of the infor-
(34 percent), all areas males (38 percent) mal sector, whether rural male, rural
and all areas persons (36 percent). female, urban male, urban female; but
males had a slight edge over females.
Clearly, however, there were pronounced
male-female and rural-urban differen- Formal employment in the informal
tials, as seen from the percentages. sector (formal employees in informal
Women ‘contributing family work- sector) recorded low percentages in all
ers’ 32 percent in rural areas, in ur- segments (rural male, rural female, ur-
ban areas ‘employees’ (35 percent: 29 ban male, urban female), but was slight-
percent in informal sector and 6 per- ly more in urban areas compared to ru-
cent in formal sector), and in all areas ral areas.
‘employees’ (33 percent of which 26
percent were in informal sector and 7 Workers in Formal & Informal
percent in formal sector) constituted Sector Enterprises
the majority of workers in informal Table 3.2 (p.26) presents percentag-
employment. es of non-agricultural workers (PS +
Also, ‘contributing family workers’ SS) reporting enterprise type for each
as a component of informal employ- population segment of India during
ment recorded substantially high- the 1999-2000 survey. It would be seen
er percentages among females com- that 87 percent of rural and 92 percent
pared to males, in rural, urban and all of urban non-agricultural workers (PS
areas; but gender disparity was signif- + SS) reported the type of enterprise
icantly higher (almost double) in rural in which they worked. Table 3.1 is pre-
areas compared to urban areas. pared on the basis of the data collected
Own-account workers forming part for such workers.
of informal employment were sig- It is reasonable to assume that own-
nificantly higher among male workers account workers, employers and regu-
compared to female workers in rural, lar salaried/wage employees working
urban and all areas. in formal sector enterprises can easily
Among non-agricultural workers identify the type of enterprise in which
reporting the enterprise type, fe- they work. Similarly, regular salaried/
male informal employees recorded a wage employees working in informal
Estimation of Informal Employment 25

sector enterprises and having formal workers (PS + SS) reporting enterprise
jobs can also identify the type of en- type as obtained in Table 3.1 and other
terprise in which they work without information given in Table 3.2, it is
much difficulty. possible to estimate the percentages
All other categories of workers in for- of informal employment among all
mal or informal sector enterprises or usual status non-agricultural workers
households, by definition, belong to the (both reporting enterprise type and not
category of informal workers having in- reporting enterprise type) for all the
formal employment. From this it would population segments. Such estimates are
be safe to assume that non-agricultur- given in the last column of Table 3.2.
al workers not able to report the type The percentages of informal emp-
of enterprise in which they work and/ loyment increased by one or two per-
or such workers for whom the investi- centage points for each population
gator cannot identify it either, belong to segment compared to those obtained
the category of ‘informal employment’
in Table 3.1 based on data for non-
rather than ‘formal employment’.
agricultural workers (PS + SS) reporting
For this reason, in Table 3.2, 100 per- enterprise type; but the comparisons
cent of such workers are noted to be in among the increased percentages
‘informal employment’. remained the same. There is, therefore,
Making use of percentages of informal reason to assume that all comparisons
employment among non-agricultural reported earlier remain valid for the non-
Table 3.2 : Percentage of non-agricultural workers (PS + SS) reporting enterprise type
and percentage of informal employment among non-agricultural workers (PS + SS)
Population Percentage of Percentage of Percentage of informal Percentage of informal
Segment of India non-agricultural informal employment employment among employment among
workers (PS + SS) among non- non-agricultural non-agricultural
reporting enterprise agricultural workers workers (PS + SS) not workers (PS + SS)
type among non- (PS + SS) reporting reporting enterprise
agricultural workers enterprise type type
(PS + SS)
Rural males 86.1 85.8 100 87.8
Rural females 88.5 90.7 100 91.8
Rural Persons 86.6 86.7 100 88.5
Urban males 92.0 74.9 100 76.9
Urban females 90.3 76.1 100 78.4
Urban persons 91.7 75.1 100 77.2
All areas: males 89.4 79.0 100 81.2
All areas: females 89.4 82.4 100 84.3
All areas: persons 89.4 79.6 100 81.8

agricultural workers (PS + SS) in each of the out and the results are presented in
population segments. Table 3.3 separately for each of the
population segments - rural males, rural
Informal Employment among females, rural persons, urban males,
Agricultural Workers urban females, persons, all areas (rural +
As mentioned earlier, for usual principal urban): males, all areas: females and all
and subsidiary status workers engaged areas: persons, at the country level.
in agricultural (and related) activities,
the type of enterprise in which they Informal Employment among
worked was not recorded. All Workers
Without reference to enterprise type, The percentage share of agricultural
the methodology has been given for workers among all workers in each of
identifying an agricultural worker (PS the population segments of India is
+ SS) having informal employment. presented in Table 3.4 (p.28) along with
Following that methodology and by the percentages of informal employment
re-tabulating the household level data among (a) agricultural workers and (b)
collected on agricultural workers in the non-agricultural workers.
NSS survey, percentage distribution Making use of these estimates, it is
of agricultural workers (PS + SS) by now possible to compute the perce-
type of employment has been worked ntages of informal employment among
Table 3.3 : Percentage distribution of agricultural workers (PS + SS) - 1999-2000

Type of Rural India Urban India India (rural + urban)
Employment Males Females Persons Males Females Persons Males Females Persons
FORMAL
1. Employers 1.4 0.5 1.0 2.1 0.6 1.5 1.4 0.5 1.0
2. Employees 0.6 0.4 0.6 2.4 1.7 2.1 0.7 0.5 0.6
3. Formal
2.0 0.9 1.6 4.5 2.3 3.6 2.1 1.0 1.6
employment
INFORMAL
4. Own-account
38.2 13.0 28.3 42.3 16.9 32.1 38.4 13.2 28.5
workers
5. Employers 0.1 0 0.1 0.1 0 0.1 0.1 0 0.1
18.5 42.9 28.1 14.5 33.7 22.3 18.4 42.5 27.9
workers
7. Employees 41.2 43.2 41.9 38.6 47.1 41.9 41.0 43.3 41.9
8. Informal
98.0 99.1 98.4 95.5 97.7 96.4 97.9 99.0 98.4
employment
9. Total
100 100 100 100 100 100 100 100 100
employment
10. Estimate (in ‘000)
of agricultural 140,568 88,887 229,455 5,089 3,355 8,444 145,657 92,242 237,899
workers (PS + SS)

all workers for each of the population among rural female manufacturing
segments of India. These have been workers reporting enterprise type and
worked out and presented in the last the lowest percentage (76 percent) among
column of Table 3.4. urban male workers segment. Whether
in rural or urban areas, female workers were
While only 15 percent of female workers
found to have a higher percentage of informal
were engaged in non-agricultural activities,
employment than male workers.
29 percent of male workers were employed
in the non-agricultural sector, an indication In rural India, the highest component
of employment that was available outside of informal employment among male
agriculture and related activities in the rural workers was own-account workers,
areas of the country. while contributing family workers
formed the highest component of
The Table also shows that 92 percent of
informal employment among female
usual principal and subsidiary status workers
workers.
in India had ‘informal employment’.
In urban India, the highest component
Manufacturing Sector of informal employment was recorded
Table 3.5 (p.29) shows that at the country by informal employees among male
level, 85 percent of manufacturing workers workers and by own-account workers
(PS + SS) reporting enterprise type had among female workers. This is a clear
informal employment. As expected, demonstration of rural-urban and
the highest percentage (96 percent) of male-female differentials in the nature
informal employment was recorded of informal employment.
Table 3.4 : Percentage of informal employment among all workers (PS + SS) by
population segment of India - 1999-2000
Population Percentage of Percentage of Percentage of Percentage of

Segment agricultural (PS + SS) informal employment informal employment informal employment
workers to total (PS + among agricultural among non- among total (PS + SS)
SS) workers (PS + SS) workers agricultural (PS + SS) workers
workers
Rural males 71.4 98.0 87.8 95.1
Rural females 85.4 99.1 91.8 98.0
Rural persons 76.2 98.4 88.5 96.0
Urban males 6.6 95.5 76.9 78.1
Urban females 17.7 97.7 78.4 81.8
Urban persons 8.8 96.4 77.2 78.9
All areas: males 53.2 97.9 81.2 90.1
All areas: females 75.0 99.0 84.3 95.3
All areas: persons 59.9 98.4 81.8 91.7

Table 3.5 : Percentage distribution of manufacturing workers (PS + SS) reporting
Sl Type of employment Rural India Urban India India (Rural + Urban)
No.
In Formal Sector
0.5 0.9 0.7 0.2 0.2 0.2 0.3 0.6 0.4
(formal)
2. Employers (formal) 0 0 0 0.1 0 0.1 0.1 0 0.1
4. Formal employment in
5.0 2.8 4.4 18.9 6.1 16.6 13.5 4.2 11.3
formal sector
0.2 0.1 0.2 0 0 0 0.1 0 0.1
workers (informal)
6.5 4.5 5.9 6.7 4.4 6.3 6.6 4.4 6.1
in formal sector
11.5 7.3 10.3 25.6 10.5 22.9 20.1 8.6 17.4
sector
In Informal Sector
44.3 35.7 41.6 26.8 36.5 28.5 33.7 36.0 34.2
(informal)
10. Employers (informal) 1.0 0.1 0.7 2.2 0.2 1.8 1.7 0.2 1.3
11.5 38.5 20.1 9.1 27.2 12.4 10.0 33.7 15.8
workers (informal)
85.8 91.5 87.6 69.0 86.1 72.0 75.5 89.3 78.8
in informal sector
2.7 1.2 2.1 5.4 3.4 5.1 4.4 2.1 3.8
Informal sector
16. Employment in
88.5 92.7 89.7 74.4 89.5 77.1 79.9 91.4 82.6
informal sector
20. Estimate (in 000) of
manufacturing workers
12805 7340 20145 15977 4276 20253 28782 11616 40398
(PS + SS) reporting
enterprise type

Table 3.6 tabulates the percentage of Construction Sector
manufacturing workers (PS + SS) report-
Table 3.7 (p.31) shows informal em-
ing enterprise type in each of the popula-
ployment among construction sector
tion segments: rural males, rural females,
workers recorded 97 percent in urban
rural persons, urban males, urban fe-
India, 98 percent in rural and 98 per-
males, urban persons, all areas: males, all
cent in India (rural + urban). Among
areas: females and all-areas: persons.
female construction workers both in
Making use of these estimates, and the urban India and at the country level,
percentages of informal employment as 99 percent were engaged in informal
obtained in Table 3.5, as well as taking employment, while the correspond-
the percentage of informal employment ing percentage for male workers was
among manufacturing workers (PS + SS) 97. In rural India, 100 percent of em-
not reporting enterprise type as 100, the ployment among female construction
estimates of ‘percentages of informal em- workers was of informal nature and
ployment among manufacturing workers among male workers 98 percent of
(PS + SS)’ were computed and presented employment was ‘informal’ in the con-
in Table 3.6 in the last column. struction sector.
Table 3.6 : Percentage of manufacturing workers (PS + SS) reporting enterprise type
and percentage of informal employment among manufacturing workers (PS + SS)
Population segment Percentage of Percentage of informal Percentage of informal
manufacturing workers (PS employment among employment among
+ SS) reporting enterprise manufacturing workers (PS + manufacturing workers (PS
type among manufacturing SS) reporting enterprise type + SS)
workers
Rural males 89.1 92.3 93.1
Rural females 92.8 96.0 96.3
Rural persons 90.4 93.5 94.1
Urban males 92.5 75.7 77.5
Urban females 94.0 90.5 91.1
Urban persons 92.8 78.3 79.9
All areas: males 91.0 82.1 83.7
All areas: females 93.2 93.7 94.1
All areas: persons 91.6 84.9 86.2
Note: Percentage of informal employment among manufacturing workers (PS + SS) not reporting enterprise type is taken as 100 for each popula-
tion segment.

Table 3.7 : Percentage distribution of construction workers (PS + SS) reporting
Rural India Urban India India (Rural + Urban)

Type of employment
In Formal Sector
0.5 0 0.4 0.7 0 0.6 0.6 0 0.5
(formal)
2. Employers (formal) 0 0 0 0 0 0 0 0 0
1.8 0.1 1.5 2.6 0.8 2.4 2.2 0.5 2.0
formal sector
0 0 0 0 0 0 0 0 0
workers (informal)
10.9 29.6 12.9 9.8 12.3 10.1 10.3 21.0 11.4
in formal sector
12.7 29.7 14.4 12.4 13.1 12.5 12.5 21.5 13.4
sector
In Informal Sector
17.7 0.8 16.0 21.5 1.2 19.4 19.7 0.9 17.8
(informal)
10. Employers (informal) 0.4 0 0.4 1.4 0.6 1.3 1.0 0.3 0.9
1.0 1.1 1.0 2.4 1.7 2.3 1.7 1.4 1.6
workers (informal)
12.
Employees (informal) 68.0 68.4 68.0 61.8 83.2 64.0 64.8 75.8 66.0
87.1 70.3 85.4 87.1 86.7 87.0 87.1 78.4 86.3
in informal sector
14. Employees (formal) 0.2 0 0.2 0.5 0.2 0.5 0.4 0.1 0.3
0.2 0 0.2 0.5 0.2 0.5 0.4 0.1 0.3
informal sector
16. Employment in
87.3 70.3 85.6 87.6 86.9 87.5 87.5 78.5 86.6
informal sector
construction workers
6972 776 7748 5682 678 6360 12654 1454 14108
(PS + SS) reporting
enterprise type

Informal employees in formal sector among rural female workers, 87 percent
among female construction workers in among rural male workers, 87 percent
rural India (30 percent) constituted a among urban female workers and 88
substantially higher proportion com- percent among urban male workers be-
pared to cause there was substantial informal employ-
(a) the corresponding percentage amo- ment in formal sector construction enterprises.
ng male construction workers (11 About 20 percent of construction
percent) in rural India as well as workers could not report the type of
(b) the situation among female con- enterprise in which they worked at the
struction workers (12 percent) in ur- all-India level, but informal employ-
ban India. ment was 96 percent or more among
construction workers reporting enter-
The gender and rural-urban differen- prise type in any of the population seg-
tials remain distinct as statistics indicate ments. It was safe to assume that none
elsewhere. Informal employment was mostly of the workers not reporting enter-
accounted for by employees (male and female) prise type could have formal employ-
and own-account workers (only males) in rural ment in construction sector. As such,
as well as urban India. informal employment among all female con-
Compared to more than 96 percent of struction workers was nearly 100 percent in
employment being ‘informal employ- rural India and all-India, and 99 percent in
ment’ in all population segments, ‘em- urban India. Among males, it was 98 percent
ployment in informal sector’ consti- in rural India and all-India, and 97 percent
tuted 70 percent of total employment in urban India. (Table 3.8)
Table 3.8 : Percentage of construction workers (PS + SS) reporting enterprise type and
percentage of informal employment among construction workers (PS + SS)
Population segment Percentage of construction Percentage of informal Percentage of informal

workers (PS + SS) reporting employment among employment among
enterprise type among construction workers (PS + construction workers (PS
construction workers SS) reporting enterprise type + SS)
Rural males 78.7 98.0 98.4
Urban males 84.7 96.9 97.4
All areas : males 81.3 97.4 97.9
All areas : females 70.8 99.4 99.6
All areas : persons 80.1 97.7 98.2
Note : Percentage of informal employment among construction workers not reporting enterprise type is taken as 100 for each population
segment.

Trade Sector trade sector among males or females in rural or
An interesting observation in Table 3.9 urban India, with males recording higher per-
was that own-account workers formed the centages than females in rural as well as ur-
largest chunk of informal employment in the ban areas.
Table 3.9 : Percentage distribution of trade workers (PS + SS) reporting

Type of employment
In Formal Sector
0 0.1 0 0.2 0.1 0.2 0.1 0.1 0.1
(Formal)
2. Employers (Formal) 0 0 0 0 0 0 0 0 0
3. Employees (Formal) 0.2 0.1 0.2 2.5 2.1 2.5 1.8 1.4 1.8
0.2 0.2 0.2 2.7 2.2 2.7 1.9 1.5 1.9
formal sector
0 0 0 0 0 0 0 0 0
workers (Informal)
6. Employees (Informal) 1.4 0.2 1.3 1.4 1.0 1.4 1.4 0.7 1.3
7. Informal employment in
1.4 0.2 1.3 1.4 1.0 1.4 1.4 0.7 1.3
formal sector
1.6 0.4 1.5 4.1 3.2 4.1 3.3 2.2 3.2
sector
In Informal Sector
74.1 52.6 71.7 58.1 52.1 57.5 63.3 52.3 62.1
(Informal)
10. Employers (Informal) 0.7 0.2 0.7 2.0 0.3 1.8 1.5 0.3 1.5
11.0 41.5 14.3 14.5 29.7 16.0 13.3 33.7 15.5
workers (Informal)
12. Employees (Informal) 12.5 5.3 11.7 20.4 14.4 19.8 17.9 11.3 17.1
13. Informal employment in
98.3 99.6 98.4 95.0 96.5 95.1 96.0 97.6 96.2
informal sector
14. Employees (Formal) 0.1 0 0.1 0.9 0.3 0.8 0.7 0.2 0.6
0.1 0 0.1 0.9 0.3 0.8 0.7 0.2 0.6
Informal sector
16. Employment in informal
98.4 99.6 98.5 95.9 96.8 95.9 96.7 97.8 96.8
sector
trade workers (PS + SS) 10946 1505 12451 18942 2429 21371 29888 3934 33822
reporting enterprise type

‘Employment in informal sector enter- not aggregates, based on the NSS da-
prises’ was almost of the same order as ta. Compared to population figures
‘informal employment’ in rural and ur- or projections thereof obtained on
ban areas and among males and females. the basis of data collected in Indian
Employment in informal sector trade Population Censuses, population esti-
enterprises was 97 percent among per- mates derived from the surveys con-
sons, and males and 98 percent among ducted by the NSS are, in general, on
females at the all-India level. In ru- the lower side, mainly due to the differ-
ral India, the percentages were 99 per- ences in methods and coverage adopt-
cent among persons, 98 percent among ed by the Indian NSS in comparison to
males and 100 percent among females. the population census operation.
In urban India, these percentages were However, the ratios obtained from the
96 percent among persons and males Indian NSS are much closer to the ra-
and 97 percent among females. tios obtained using census figures. Thus
Table 3.10 shows that formal employ- employment estimates from the NSS are
ment in the trade sector, though small, usually presented as ratios. To estimate
existed only in urban areas of the coun- an absolute number in any category, it
try during 1999-2000. is advisable to apply survey estimates of
ratios to the census population or pro-
Estimates of Aggregates for jection thereof, for that category.
Informal Employment Using the population estimates obtained
So far in this chapter, estimates of in- in 1991 and 2001 population census-
formal employment have been pre- es in India, population as on 1.1.2000
sented only in terms of ratios and has been estimated in thousands for
Table 3.10 : Percentage of trade workers (PS + SS) reporting enterprise type
and percentage of informal employment among trade workers (PS + SS)
by population segment of India, 1999-2000
Population segment Percentage of trade Percentage of informal Percentage of informal

workers (PS + SS) reporting employment among trade employment among trade
enterprise type among trade workers (PS + SS) reporting workers (PS + SS)
workers enterprise type
Rural males 91.7 99.7 99.7
Urban males 93.6 96.4 96.6
All areas : males 92.9 97.4 97.6
All areas : females 88.1 98.3 98.5
All areas : persons 92.3 97.5 97.7
Note : Percentage of informal employment among trade workers not reporting enterprise type is taken as 100 for each population segment.

each of the population segments: rural level for all areas must tally with the
males, rural females, rural persons, ur- sum of estimates for rural and urban
ban males, urban females, urban per- areas – the estimates of aggregates
sons and all areas: males, females and have been rounded off in the Table.
persons. The size of the total workforce
The estimated workforce (usual PS +
(workers or employed) of age 5 and
SS) in India as on 1.1.2000 was 397 mil-
above has been determined by applying
lion. The informal workforce was an es-
economic (work) participation rates ob-
timated 365 million workers, of which
tained from the NSS to population esti-
247 million were male workers and
mates as on 1.1.2000.
118 million were female workers. The
Sectoral Distribution number of informal workers in rural
India was estimated at 289 million and
The sectoral distribution of total work-
in urban India 76 million. Rural infor-
ers according to broad industry catego-
ry (agriculture, non-agriculture, manu- mal male workers were estimated as 187
facturing, construction, trade, private million and the estimate of rural infor-
households employing paid domestic mal women workers was 102 million.
workers, etc.) obtained from the survey In urban India, estimated male infor-
has been used to obtain the estimates of mal workforce was 60 million and fe-
aggregate number of (principal + sub- male informal workforce was estimat-
sidiary statuses) usual workers in sectors ed as 16 million.
like agricultural, non-agricultural, man- Data and estimates given in this chapter
ufacturing, etc., from the aggregate esti- could be drawn upon for in-depth anal-
mates of total workers. Thereafter, the yses and research on the extent of em-
estimates of informal employment ob- ployment generated in the formal and
tained as percentages in each category informal sectors of the economy, and
of industry (agriculture, etc.) have been within those sectors the diverse seg-
used to obtain the estimates of aggre- ments that display varying patterns of
gates of informal workers by industri- work opportunities available to persons
al category. in rural and urban areas. Even there, a
All the above-mentioned estimates distinct gender differential perceived in
(in ’000) are presented in Table 3.11 these trends offers material for further
(p.36). Because of the arithmeti- research and focused debate, keeping
cal consistency required – for in- in sight also the high potential for crea-
stance, estimates of persons must tal- tion of jobs as regards female workers
ly with the sum of estimates for males in the informal sector vis-à-vis the for-
and females, or estimates at all-India mal sector.

Table 3.11: Estimates (in ’000) of usual status (principal + subsidiary)
workers as on 1.1.2000
Type of Employment
1. Population 370,761 348,104 718,865 148,853 136,367 285,220 519,614 484,471 1,004,085
2. Total workers 196,874 104,083 300,957 77,106 18,955 96,061 273,980 123,038 397,018
3. Informal employment 187,227 102,001 289,228 60,220 15,505 75,725 247,447 117,506 364,953
4. Formal employment 9,647 2,082 11,729 16,886 3,450 20,336 26,533 5,532 32,065
5. Agricultural workers 140,568 88,887 229,455 5,089 3,355 8,444 145,657 92,242 237,899
137,757 88,087 225,844 4,860 3,278 8,138 142,617 91,365 233,982
in agriculture
2,811 800 3,611 229 77 306 3,040 877 3,917
in agriculture
8. Non-agricultural
56,306 15,196 71,502 72,017 15,600 87,617 128,323 30,796 159,119
workers
49,437 13,950 63,387 55,381 12,230 67,611 104,818 26,180 130,998
in non-agriculture
6,869 1,246 8,115 16,636 3,370 20,006 23,505 4,616 28,121
non-agriculture
11. Manufacturing
14,372 7,910 22,282 17,272 4,549 21.821 31,644 12,459 44,103
workers
13,380 7,617 20,997 13.386 4,144 17,530 26,766 11,761 38,527
in manufacturing
992 293 1,285 3,886 405 4,291 4,878 698 5,576
manufacturing
14. Construction workers 8,859 1,145 10,004 6,708 910 7,618 15,567 2,055 17,622
8,717 1,144 9,861 6,534 904 7,438 15,251 2,048 17,299
in construction
142 1 143 174 6 180 316 7 323
construction
17. Trade workers 11,937 1,672 13,609 20,237 2,792 23,029 32,174 4,464 36,638
11,901 1,669 13,570 19,549 2,731 22,280 31,450 4,400 35,850
in trade
36 3 39 688 61 749 724 64 788
trade
20. Employees in private
113 182 295 576 983 1,559 689 1,165 1,854
households

SECTION IV
Employment in Informal Sector,

Poverty & Gender
Exploring the Linkages mainstay of 42 percent of households,

with 40 percent of urban population in
The principal focus of this chapter is to
such households. Casual labour house-
examine links in the Indian context be- holds constituted 14 percent of urban
tween ‘employment in the informal sec- households with 14 percent of the total
tor’, ‘poverty’ and ‘gender’ based on urban population. Residual households
the micro data at household level made formed 10 percent with 6 percent of ur-
available through the abridged work- ban population.
sheet in the NSS.
Poverty & Nature of
Rural Households
Employment
In 1999-2000, members of about 33
There is a clear relationship between
percent of rural households took re-
poverty and nature of employment
course to self-employment in agricul-
such as self-employment, casual wage
ture. They constituted about 37 per-
employment, regular wage/salary
cent of the rural population. About 13
employment, whether in rural or ur-
percent of them derived their major in-
ban areas.
come from self-employment in non-
agricultural activities and 14 percent Tables 4.1 and 4.2 (p.38) present the
of rural population belonged to these percentage of households with MPCE
households. About 32 percent were ag- below the poverty line (poor), per-
ricultural labour households, account- centages of moderately poor and very
ing for 30 percent of rural population. poor households according to house-
Other labour households accounted hold type in rural and urban India, re-
for another 8 percent, with about 8 per- spectively.
cent of rural population in such house- Rural Households
holds. Residual households formed 14
Table 4.1 shows that the percentage of poor
percent accounting for 11 percent of
households (35.7 percent) among agricultural
the rural population.
labour households was the highest followed by
Urban Households the corresponding percentage (21.5 percent) for
other (than agricultural) labour households in
Nearly 34 percent of urban households
rural areas.
with 39 percent of urban population
derived income mainly from self-em- It will be observed that the (residu-
ployment. Regular employment was the al) others category of households in
37
Table 4.1: Percentage of very poor, moderately poor and poor households in
each household type - 1999-2000, Rural India
Household type Very poor Moderately poor Poor
Self-employed in: agriculture 4.91 11.71 16.62
In non-agriculture 5.32 13.35 18.67
Agricultural labour 13.03 22.66 35.69
Other labour 7.18 14.36 21.54
Others 5.18 8.02 13.20
All households 7.82 15.19 23.01
rural areas recorded the lowest percent- by that among other (than agricultur-
age (13.2 percent) of poor households. al) labour households in rural areas.
This category of households in rural ar- Poverty alleviation for these categories
eas comprises of casual wage workers in rural areas
households whose major source of would naturally require creation of ad-
income arises mostly from contrac- ditional work for them, and this justifies
tual employment with regular wages to a large extent the employment gener-
and salaries and ation (poverty alleviation) programmes
those who earn their living from of the Government.
current returns from ownership of In urban areas, the share of poor house-
immovable assets (land or real es- holds among regular wage/salary earn-
tate) or from past financial invest- ing households was the lowest among
ments or receipts such as pension all types of households and also small-
and remittances. er than that of any type of households
The share of poor households (35.7 in rural areas (Table 4.2). Casual labour
percent) among agricultural labour households in urban areas recorded maximum
households was substantially higher percentage of poor households in either ur-
(23 percent) than that among all rural ban or rural areas. These are households
households. earning income out of casual wage em-
The percentage of very poor house- ployment mostly in non-agricultural ac-
holds was also the highest among ag- tivities (informal employment in infor-
ricultural labour households, followed mal sector enterprises as well as infor-
Table 4.2 : Percentage of very poor, moderately poor and poor households in
each household type - 1999-2000, Urban India
Household type Very poor Moderately pzoor Poor
Self-employed 7.04 13.49 20.53
Regular wage/ salaried 2.73 6.59 9.32
Casual labour 18.51 23.99 42.50
Other households 6.50 10.25 16.75
All households 6.81 11.76 18.57

mal employment in formal sector enter- Such estimates are presented in Tables
prises) in urban areas. 4.3 and 4.4 (p.40) for rural and urban
Significantly, casual labour households India, respectively. Table 4.3 shows
in urban areas also recorded the high- that female members of poor house-
est percentage of very poor households accounted for half the total per-
holds, whether in urban or rural areas. son-days of female casual wage em-
The percentage of urban self-employed ployment in public works in rural India
households below the poverty line was while the corresponding share for
higher than that of poor rural house- males was 28 percent. Thus, participation
holds among self-employed in non-ag- of poor women in rural casual wage employ-
riculture and self-employed in agricul- ment in public works was much higher than
ture. This was true for very poor house- for poor men.
holds as well.
From Table 4.4 it may be seen that in
Share of Poor Households the total person-days of regular wage/
in Total Person-days of salaried employment in agriculture and
Employment related activities in urban India, poor
It is of interest to know the percentage persons had a share of 36 percent. In
share of poor, moderately poor and very the total person-days of regular wage/
poor households in total person-days of salaried employment in non-agricultur-
employment estimated on current daily al activities in urban India, the poor had
basis for each type of employment. only a share of 10.7 percent.
Table 4.3 : Percentage of person-days of employment taken up on current daily status basis
by members (males, females, persons) of very poor, moderately poor and
poor households for each type of employment - 1999-2000, Rural India
Rural Males Rural Females Rural Persons
Type of
Very Moderately Poor Very Moderately Poor Very Moderately Poor
employment
poor poor poor poor poor poor
Self-employed:
In agriculture 5.17 13.89 19.06 6.48 15.42 21.90 5.60 14.38 19.98
In non-agriculture 4.69 13.78 18.47 7.14 17.41 24. 55 5.28 14.71 19.99
Regular employee:
In agriculture 7.51 19.79 27.30 6.38 24.22 30.60 7.32 21.03 28.35
In non-agriculture 1.68 6.41 8.09 3.67 7.43 11.10 2.16 6.71 8.87
Casual labour in:
Public works 15.59 12.09 27.68 15.72 34.04 49.76 15.78 17.93 33.71
Agriculture 11.87 25.93 37.80 13.10 26.18 39.28 12.28 25.99 38.27
Non-agriculture 7.22 16.87 24.09 10.32 20.43 30.75 7.60 17.63 25.23
General population
(all statuses: LF + 8.16 18.13 26.29 8.82 19.18 28.00 8.49 18.61 27.10
not in LF)
L.F. = Labour Force

Table 4.4 : Percentage of person-days of employment taken up on current daily status basis by
members (males, females, persons) of very poor, moderately poor and poor
households for each type of employment - 1999-2000, Urban India
Urban Males Urban Females Urban Persons

Type of
employment Very Moderately Poor Very Moderately Poor Very Moderately Poor
poor poor poor poor poor poor
Self-employed:
In agriculture 10.67 18.08 28.75 13.76 22.93 36.69 11.36 19.45 30.81
Regular employee:
In agriculture 9.42 15.51 24.93 20.35 29.89 50.24 14.38 21.71 36.09
Casual labour in:
Public works 16.10 27.81 43.91 40.32 39.06 79.38 25.65 35.13 60.78
Agriculture 25.56 35.30 60.86 28.57 31.42 59.99 26.20 33.42 59.62
Non-agriculture 16.85 22.17 39.02 18.82 25.96 44.78 17.17 22.90 40.07
General population
(all statuses: LF + 8.83 13.82 22.65 9.94 14.65 24.59 9.39 14.23 23.62
not in LF)
L.F. = Labour Force
Households with Employment Poverty Ratios

in Informal Sector: Incidence Poverty ratios have also been disaggre-
of Poverty gated into ‘very poor’ and ‘moderately
Table 4.5 shows the poverty ratios poor’ categories.
among persons of households sustain- The incidence (poor) as well as intensi-
ing on employment in informal sector ty (very poor) of poverty among house-
separately for broad industrial divisions: holds sustaining on employment in in-
manufacturing, construction, trade and formal sector were higher in urban are-
all non-agricultural activities in rural and as compared to rural areas of the coun-
urban areas of the country. try. Further, in rural India, the poor and
Table 4.5 : Poverty ratios among persons of households sustaining on employment

in informal sector by broad industry division - All-India, 1999-2000
Rural Urban
Broad industry division Very poor Moderately Poor Very poor Moderately Poor
poor poor
Manufacturing 6.85 16.90 23.75 9.42 17.04 26.46
Construction 6.80 19.49 26.29 14.40 19.51 33.91
Trade 4.39 12.82 17.21 8.44 12.94 21.38
All non-agricultural activities 6.06 15.82 21.88 10.98 16.28 27.26

very poor among those sustaining on employ- cultural activities taken together. In ur-
ment in the informal sector constituted lower ban areas, self-employment in the infor-
percentages compared to the general sit- mal construction sector recorded lowest
uation among rural people. Urban India, poverty ratio.
though, showed higher poverty incidence and in-
In general, except in construction activity, ur-
tensity among households sustaining on employ-
ban areas recorded higher poverty ratios com-
ment in the informal sector than the corre-
pared to rural areas.
sponding overall situation.
Self-employment in the informal trade
There is also a clear indication that the
and construction sectors helped in re-
construction sector has a higher in-
duction of poverty levels compared to
cidence and intensity of poverty, but
the general population in both rural and
these are lower in trade activities in the
urban India. While self-employment
informal sector compared to the situa-
in the informal manufacturing sector
tion in manufacturing activities.
helped in reduction of poverty level in
Households Sustaining on Self- the rural areas, the phenomenon was
Employment not repeated in the urban areas.
Table 4.6 presents the results on pover- Households Sustaining on
ty ratios among persons of households Different Employment Types
sustaining on self-employment in the in-
formal sector by broad industry division Table 4.7 (p.42) presents the poverty
and all non-agricultural activities in ru- situation among persons in households
ral and urban India during 1999-2000. sustaining on (a) self-employment, (b)
Poverty ratios recorded in construction regular wage/salaried employment and
will be seen as significantly lower than (c) casual wage employment, in the in-
those recorded in manufacturing, both formal sector in urban India separately
in rural and urban areas. for manufacturing, construction, trade
and all non-agricultural activities.
In rural areas, households sustain-
ing on self-employment in the infor- As expected, incidence of poverty (poor) as
mal trade sector had the lowest pover- well as intensity of poverty (very poor) were
ty ratios among all three industrial divi- highest in households sustaining on casu-
sions, as also compared to all non-agri- al wage employment and lowest in households
Table 4.6 : Poverty ratios among persons of households sustaining on self-employment

in informal sector by broad industry division - All India, 1999-2000
Rural Urban
poor poor
Manufacturing 6.96 17.18 24.14 8.90 16.99 25.89
Construction 3.59 17.39 20.98 6.76 13.52 20.28
Trade 4.39 12.44 16.83 8.27 12.74 21.01

Table 4.7: Poverty ratios among persons of households sustaining on employment in informal sector by
household type and by broad industry division - Urban India, 1999-2000
Household Type
Self-employed Regular salary/ wage earning Casual
Broad industry division
Very Moderately Poor Very Moderately Poor Very Moderately Poor
poor poor poor Poor poor poor
Manufacturing 8.90 16.99 25.89 6.76 14.54 21.30 18.52 23.03 41.55
Construction 6.76 13.52 20.28 5.91 8.79 14.70 19.48 23.87 43.35
Trade 8.27 12.74 21.01 7.24 11.87 19.11 17.20 19.79 36.99
All non-agricultural activities 9.53 15.18 24.71 7.42 14.15 21.57 22.86 24.20 47.06
sustaining on regular wage/salaried employ- construction, trade or non-agricultur-

ment. Self-employed households figured al activities taken together, vis-à-vis the
in between the highest and lowest levels poverty situation in general population
in respect of (a) manufacturing, (b) con- in rural areas of the country. However,
struction, (c) trade and (d) all non-agri- the intensity of poverty measured by very poor
cultural activities when comparison was in rural female-headed households sustaining
made within each industrial division in on employment in informal construction activi-
urban India. ty was higher than the percentage of very
Regular wage/salaried employment in poor in the general rural population.
urban informal sector activities clearly In urban India, there was higher incidence
enabled the households sustaining on and intensity of poverty among female-head-
such employment to record lower in- ed households sustaining on employment in
cidence and intensity of poverty com- the informal sector in any one of the three
pared to the situation obtaining in the broad industries or all non-agricultural
general population of urban areas. activities compared to the situation in
general population.
Female-headed Households
Table 4.8 demonstrates the incidence of Households with Only One Male
less poverty among persons belonging Worker
to such households sustaining on em- As Table 4.9 shows, both the incidence
ployment in informal manufacturing, as well as intensity of poverty were
Table 4.8: Poverty ratios among persons belonging to female-headed households sustaining on
employment in informal sector by broad industry division - All India, 1999-2000
Rural Urban
poor poor
Manufacturing 7.45 17.40 24.85 13.23 23.90 37.13
Construction 15.15 4.61 19.76 18.86 30.09 48.95
Trade 0.69 9.96 10.65 12.08 13.14 25.22

Table 4.9: Poverty ratios among persons in households sustaining on employment in informal sector
with only one male usual principal status worker (15 years & above) by broad industry
Rural Urban
poor poor
Manufacturing 5.59 13.53 19.12 8.06 15.49 23.55
Construction 4.91 18.42 23.33 12.72 18.49 31.21
Trade 3.53 13.44 16.97 7.91 11.60 19.51
lower in these types of households in sector with only one female usual prin-
manufacturing or construction or trade cipal status worker (age 15 years and
or all non-agricultural activities taken above)– except in the case of all non-
together, compared to the poverty situ- agricultural activities – showed pover-
ation in the general population in rural ty ratios (poor) in manufacturing, con-
India, especially in trading activity. struction as well as trading activities no
higher than the poverty ratio in gener-
In urban India, there was higher incidence
al population in rural India. Indeed, both
and intensity of poverty among female-head-
the incidence of poverty as well as its intensity
ed households sustaining on employment in
were substantially lower in single female work-
the informal sector in any one of the three
er rural households.
broad industries or all non-agricultural
activities compared to the situation in In urban India, except in the case of trading
general population. activity, both the incidence and intensity of pov-
erty were substantially higher in manufactur-
Households with Only One Female ing, construction and all non-agricultur-
Worker al activities taken together for this type
As per Table 4.10, households that of households in comparison with the
sustained on employment in informal poverty situation in general population.
Table 4.10: Poverty ratios among persons in households sustaining on employment in informal
sector with only one female usual principal status worker (15 years & above) by broad industry
Rural Urban
poor poor
Manufacturing 11.47 15.71 27.18 12.48 21.64 34.12
Construction 7.01 17.23 24.24 20.68 27.54 48.22
Trade 3.69 5.54 9.23 15.53 8.85 24.38

Households with One Male & One Households with No Literate
Female Worker Member of age 15 years &
The incidence as well as intensity of poverty in above
such households is seen to be higher in rural ar- As seen in Table 4.12, (p.45) the pover-
eas than the poverty situation in gener- ty ratios among the persons in house-
al rural population in respect of such holds sustaining on employment in in-
households sustaining on employment formal sector with no literate member
in informal manufacturing, construc- of age 15 years and above were higher
tion and non-agricultural activities tak- in the urban areas compared to those in
en together (Table 4.11). rural areas in all the industrial divisions.
In urban India, all the types of households con- In both rural and urban areas, the in-
sidered here recorded significantly higher inci- cidence as well as intensity of poverty
dence as well as intensity of poverty compared were substantially higher in all the four
to the poverty situation in the general broad industrial divisions compared to
urban population. Also, except in the the poverty situation in corresponding
case of construction activity, urban pov- general populations.
erty ratios were higher than the corre- Households with No Literate
sponding poverty ratios in the rural ar-
Female Member of age 15 years &
eas in manufacturing, trade and all non-
above
agricultural activities taken together.
The literacy status of households pre-
In rural as well as urban areas, the inci-
sented in Table 4.13 (p.45) is less re-
dence and intensity of poverty in house-
strictive than the literacy status of the
holds sustaining on employment in the
household as discussed in the previous
informal manufacturing sector were in
paragraph. Interestingly, both the inci-
increasing order in respect of house-
dence and intensity of poverty recorded
holds with
in the households considered here were
(a) only one male worker, lower than those in households consid-
(b) only one female worker and ered earlier in the respective industry di-
(c) only one male and one female worker. visions and locations (rural or urban).
Table 4.11: Poverty ratios among persons in households sustaining on employment in informal sector
with only one male and one female usual principal status workers (15 years & above)
by broad industry division - All India, 1999-2000
Rural Urban
poor poor
Manufacturing 12.10 22.29 34.39 18.10 20.51 38.61
Construction 21.71 22.88 44.59 16.54 25.31 41.85
Trade 12.41 11.50 23.91 15.28 12.59 27.87

sector with no literate member of age 15 years and above by broad industry
division - All-India, 1999-2000
Rural Urban
poor poor
Manufacturing 15.50 24.11 39.61 18.76 38.42 57.18
Construction 12.83 25.46 38.29 29.44 26.43 55.87
Trade 10.41 19.00 29.41 28.42 26.03 54.45
However, in rural areas, the incidence State-level Results

of poverty in these households, except
The following paragraphs deal with re-
for trade, was higher than the incidence
sults for 16 major Indian States ob-
of poverty recorded in the general ru-
tained on similar lines as above. The
ral population. Both the incidence and
States covered in the present study are
intensity of poverty observed in the
Andhra Pradesh, Assam, Bihar, Gujarat,
households considered here were higher
Haryana, Himachal Pradesh, Karnataka,
than the ratios recorded in general pop-
Kerala, Madhya Pradesh, Maharashtra,
ulation in urban India. Finally, in each
Orissa, Punjab, Rajasthan, Tamil Nadu,
of the industry divisions, urban pover-
Uttar Pradesh and West Bengal.
ty ratios (both incidence and intensity)
were substantially higher than those in Andhra Pradesh
the rural areas.
Table 4.14 relating to the results in
An important conclusion that can be Andhra Pradesh contains success sto-
drawn from the above is that in employ- ries of poverty reduction in rural areas.
ment matters, female literacy is more important These were found among members of
in urban areas than in rural areas. households sustaining on employment
sector with no literate female member of age 15 years & above
by broad industry division - All-India, 1999-2000
Rural Urban
poor poor
Manufacturing 9.60 19.85 29.45 17.37 24.04 41.41
Construction 9.48 24.84 34.32 19.96 24.29 44.25
Trade 7.44 17.34 24.78 18.70 21.04 39.74
All non-agricultural
9.21 20.80 30.01 19.92 23.98 43.90
activities

in informal sector with only one female finding of lower incidence and intensi-
usual principal status worker with the ty of poverty in female-headed house-
lowest poverty ratio, followed by households in rural Andhra Pradesh, appears
holds sustaining on employment in in- to reflect the impact of self-help groups
formal sector with only one adult male of women in improving the economic
worker, female-headed households sus- situation of rural households.
taining on employment in informal sec- The urban areas of Andhra Pradesh re-
tor, households sustaining on self-em- corded a higher poverty ratio than in ur-
ployment in the informal sector and ban India. However, urban households
households sustaining on employment sustaining on self-employment in infor-
in informal sector compared to the gen- mal sector recorded lower poverty ra-
eral households. tio compared to the poverty situation in
general urban households of the State.
To that extent, the situation in rural
This is a significant result, indicating
Andhra Pradesh was similar to the sit-
that self-employment in informal sector in ur-
uation in rural India except in the case
ban areas helped in reduction of poverty, un-
of households sustaining on employ-
like the case at the national level in ur-
ment in informal sector with a single ban areas.
female worker. However, the pover-
ty (incidence) ratios were significant- Special mention may be made of fe-
ly lower in rural Andhra Pradesh com- male-headed households sustaining on
employment in informal sector and
pared to the corresponding ratios in
households sustaining on employment
rural India.
in informal sector with only one adult
Also, employment taken up by single adult fe- female worker because these report-
male member of household in the informal sec- ed a reduction in poverty in rural are-
tor in rural Andhra Pradesh did not result in as, whereas there was a substantial in-
any disadvantage; in fact, it helped in re- crease in poverty in urban areas of the
duction of both incidence and intensity State compared to the situation in gen-
of poverty. This result, coupled with the eral households.

Table 4.14: Andhra Pradesh – Poverty ratios during 1999-2000 among
members of different types of households
Rural Urban
S.
Type of Household Very Moderately Very Moderately
No. Poor Poor
Poor Poor Poor Poor
1. General households 4.21 6.84 11.05 9.38 17.25 26.63
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
2.. Households sustaining on 4.23 5.24 9.47 10.35 18.69 29.04
employment in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
3. Households sustaining on self- 3.40 4.59 7.99 8.64 14.90 23.54
employment in informal sector (5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
4. Households sustaining on regular N.A. N.A. 8.16 20.29 28.45
salaried/wage employment in N.A.
informal sector (7.42) (14.15) (21.57)
5. Households sustaining on casual N.A. N.A. 17.77 26.67 44.44
N.A.
wage employment in informal sector (22.86) (24.20) (47.06)
6. Households sustaining on
employment in informal sector with 2.07 4.56 6.63 7.67 15.66 23.33
only one male worker (15 years & (5.04) (15.45) (20.49) (9.59) (14.71) (24.30)
above)
only one female worker (15 years & (8.68) (20.51) (29.19) (16.51) (16.45) (32.96)
above)
employment in informal sector 5.97 5.44 11.41 12.17 24.52 36.69
with only one male and one female (11.22) (19.38) (30.60) (15.77) (18.14) (33.91)
worker (15 years & above)
9. Female-headed households 3.32 4.09 7.41 26.20 25.95 52.15
sustaining on employment in
informal sector (5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
no female literate member (15 years (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
& above)
no literate member (15 years & (13.27) (24.16) (37.43) (28.74) (27.82) (56.56)
above)
N.A.: Not available. Poverty ratios in brackets signify corresponding ratios at national level.

Table 4.15: Assam – Poverty ratios during 1999-2000 among members
Rural Urban
S.
Type of Household Very Poor Moderately Poor Very Poor Moderately Poor
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
employment In informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
with only one male worker (15 (5.04) (15.45) (20.49) (9.59) (14.71) (24.30)
years & above)
employment in informal sector 19.58 34.42 54.00 N.A. N.A. N.A.
with only one female worker (15 (8.68) (20.51) (29.19) (16.51) (16.45) (32.96)
years & above)
6. Female-headed households 11.22 38.46 49.68 N.A. N.A. N.A.
informal sector (5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
with no female literate member (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
(15 years & above)
employment in informal sector 23.57 40.33 63.90 N.A. N.A. N.A.
with no literate member (15 (13.27) (24.16) (37.43) (28.74) (27.82) (56.56)
years & above)
N.A.: Not available. Poverty ratios in brackets signify corresponding ratios at national level.
Assam comparisons, rural areas recorded very high

From Table 4.15 it will be observed that poverty ratios compared to its urban areas.
in rural Assam, poverty ratio in gener- Bihar
al households was substantially higher
than that in rural India. However, there As is evident from Table 4.16, in ru-
was less poverty in households sustain- ral areas the poverty ratio of gener-
ing on self-employment in the infor- al households was nearly 64 percent
mal sector than was the case in gener- higher than the poverty ratio in general
al households, quite in line with the ru- households at national level. The inten-
ral all-India results. In the urban areas, sity of poverty (very poor category) in
the poverty ratio was significantly low- general households of rural Bihar was
er than that at urban India level for gen- higher by 72 percent than that in gen-
eral households As regards rural-urban eral households in rural India. In urban

Table 4.16: Bihar – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
4. Households sustaining on 13.65 27.32 40.97 19.22 20.33 39.55
employment in informal sector with
above)
above)
7. Female-headed households 12.21 39.46 51.67 48.77 23.19 71.96
informal sector (5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
& above)
above)
Figures in brackets are the corresponding poverty ratios at national level.
areas, in general households the pover- intensity of poverty in urban Bihar in households
ty ratio was higher than in such house- sustaining on employment in informal sector was,
holds at national level. however, much higher than in such households in
Although in general households there rural Bihar. Taken in relation to the all-
was lower poverty in urban areas com- India situation, both in rural and urban
pared to the poverty ratio in rural areas, areas, poverty situation (incidence and in-
there was almost the same level of pov- tensity) in the general households as well
erty in households sustaining on employ- as in households sustaining on employ-
ment in the informal sector overall. The ment in the informal sector was worse.

Gujarat sector, the poverty ratio was nearly one-
third that in rural India.
There are some interesting facts on the
situation in the State (Table 4.17). In ru- Self-employment in non-agricultural ac-
ral Gujarat, the poverty ratio was nearly tivities of informal sector in rural Gujarat
half that in rural India for general house- helped in significant reduction in the
holds. In fact, among households sus- poverty situation during 1999-2000. In-
taining on employment in the informal deed, it can be regarded as another success
Table 4.17: Gujarat – Poverty ratios during 1999-2000 among members

Rural Urban
S.
Type of Household Very Moderately Very Moderately
No. Poor Poor
Poor Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
2.. Households sustaining on employment 2.25 5.38 7.63 4.75 10.55 15.30
in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
wage/ salaried employment in informal N.A.
sector (7.42) (14.15) (21.57)
5. Households sustaining on casual wage N.A. N.A. 9.09 17.32 26.41
employment in informal sector N.A.
(22.86) (24.20) (47.06)
6. Households sustaining on employment 1.96 6.04 8.00 3.76 8.61 12.37
in informal sector with only one male
worker (15 years & above) (5.04) (15.45) (20.49) (9.59) (14.71) (24.30)
7. Households sustaining on employment N.A. N.A. N.A. 1.60 20.64 22.24
in informal sector with only one
female worker (15 years & above) (8.68) (20.51) (29.19) (16.51) (16.45) (32.96)
8. Households sustaining on employment
in informal sector with only one male 4.31 14.48 18.79 6.73 24.74 31.47
and one female worker (15 years & (11.22) (19.38) (30.60) (15.77) (18.14) (33.91)
above)
9. Female-headed households sustaining 0.10 7.79 7.89 3.85 8.97 12.82
on employment in informal sector
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
in informal sector with no female
literate member (15 years & above) (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
in informal sector with no literate
member (15 years & above) (13.27) (24.16) (37.43) (28.74) (27.82) (56.56)
N.A.: Not available. Figures in brackets are the corresponding poverty ratios at national level.

story of reduction in the incidence as well as These were all success stories.
intensity of poverty through employment in non- The poverty situation (both incidence and inten-
agricultural informal sector economic activities. sity) in rural areas of Gujarat was significant-
Urban Gujarat had a lower incidence ly lower than observed in its urban areas in al-
of poverty in general households com- most all the household groups. Indeed, spe-
pared to the poverty situation in such cific groups of households sustaining
households at the urban India lev- on employment in the informal sector
el. Also, lower poverty ratios were ob- in both rural and urban areas were able
served in households sustaining on to report reduction in poverty levels.
a) Self-employment and
Haryana
b) Single male worker in informal
sector as well as in female-headed Data in Table 4.18 shows that in rural
households sustaining on employ- Haryana, the poverty ratio was substan-
ment in informal sector compared tially lower compared to the all-India ru-
to the poverty situation in general ral figures in respect of general house-
households in urban Gujarat. holds. While households sustaining on
Table 4.18: Haryana – Poverty ratios during 1999-2000 among members

Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
with only one male worker (15 (5.04) (15.45) (20.49) (9.59) (14.71) (24.30)
years & above)
5. Households sustaining on N.A. N.A. N.A. 12.03 5.67 17.70
workers (15 years & above)
with no female literate member (15 (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
years & above)
with no literate member (15 years (13.27) (24.16) (37.43) (28.74) (27.82) (56.56)
& above)

employment in the informal sector in poverty in rural areas than the corre-
rural India recorded lower poverty com- sponding ratios at national level in re-
pared to the situation in general house- spect of general households. Compared
holds, in rural Haryana that was not so. to the situation in general households,
Here, success stories emerged from though, a higher incidence of poverty
self-employment in non-agricultural in- was recorded in households sustaining
formal sector economic activities. on employment in informal sector, un-
In urban Haryana, poverty ratio (inci- like the case in rural areas at the nation-
dence) in general households was at a al level. However, self-employment in non-
significantly lower level in comparison agricultural informal sector economic activities
to the incidence of poverty in general in rural Himachal Pradesh appeared to result
households in urban India. in reduction of poverty, with a similar situa-
tion obtaining in the urban areas as well.
The most significant finding was the
substantially lower incidence of poverty in rural Karnataka
Haryana in households sustaining on self-em-
ployment in informal sector compared to the The corresponding ratios in rural ar-
incidence of poverty in the urban areas eas of Karnataka, both for the inci-
in the same type of households. dence and intensity of poverty in gen-
eral households were lower compared
Himachal Pradesh to the ratios at the national level (Table
Table 4.19 brings out significantly low- 4.20). Households sustaining on em-
er levels of incidence and intensity of ployment in informal sector in rural
Table 4.19: Himachal Pradesh – Poverty ratios during 1999-2000 among

members of different types of households
Rural Urban
S.
Type of Household Very Poor Moderately Poor Very Moderately Poor
No.
Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
female member (15 years & above) (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
Figures in brackets are the corresponding poverty ratios at national level.

Table 4.20: Karnataka – Poverty ratios during 1999-2000 among members
Rural Urban
S.
Type of Household Very Moderately Poor Very Poor Moderately Poor
No.
Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
4. Households sustaining on regular N.A. N.A. N.A. 7.68 16.97 24.65
sector (7.42) (14.15) (21.57)
5. Households sustaining on casual wage N.A. N.A. N.A. 22.21 21.33 43.54
(22.86) (24.20) (47.06)
above)
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
Karnataka recorded significantly lower of poverty in general households than

incidence and intensity of poverty com- in urban areas at national level. There was
pared to the situation in general house- a lower incidence and intensity of poverty in
holds, similar to the result in rural areas households sustaining on single male worker in
at the all-India level. the informal sector compared to the poverty sit-
Urban Karnataka had a slightly high- uation in general households in rural as well as
er level of both incidence and intensity urban Karnataka.

Table 4.21: Kerala – Poverty ratios during 1999-2000 among members of different types of households
Rural Urban
S.
Type of Household Very Moderately Poor Very Moderately Poor
No.
Poor Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
wage/salaried employment in informal
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)
and one female workers (15 years & (11.22) (19.38) (30.60) (15.77) (18.14) (33.91)
above)
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
Kerala In urban Kerala, general households had

As Table 4.21 shows, in the rural areas, a lower incidence and intensity of pov-
both the incidence and intensity of poverty compared to the all-India level, but
erty in general households were signifi- households sustaining on employment
cantly lower than the corresponding ra- in informal sector had a higher inci-
tios in rural India. Households sustain- dence and intensity of poverty in com-
ing on employment in non-agricultur- parison with general households. This
al informal sector recorded lower in- result is similar to that obtaining in ur-
cidence and intensity of poverty than ban India. Interestingly, households sus-
general households in rural areas of the taining on single female worker in the in-
State. This result is similar to the finding formal sector recorded lower incidence
at the national level. and intensity of poverty compared to

the situation in general households in and intensity of poverty through employment in
urban Kerala. non-agricultural informal sector activities.
There were success stories in both the rural Madhya Pradesh
and urban areas, however, with specific types The results in Table 4.22 show that in
of households reporting reduction of incidence both rural and urban Madhya Pradesh,
Table 4.22: Madhya Pradesh – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
salaried/wage employment in
informal sector (7.42) (14.15) (21.57)
5. Households sustaining on casual N.A. N.A. N.A. 47.86 24.71 72.57
wage employment in informal sector
(22.86) (24.20) (47.06)
above)
above)
9. Female-headed households N.A. N.A. N.A. 26.75 17.05 43.80
informal sector (5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
& above)
above)
the incidence and intensity of poverty sustaining on self-employment in informal sec-
in general households were significant- tor in both rural and urban areas compared
ly higher than the levels experienced in to the poverty situation in general house-
general households at the all-India level. holds as well as households sustaining on
However, households sustaining on em- employment in the informal sector.
ployment in the informal sector experi-
enced lower incidence of poverty com- Maharashtra
pared to the poverty situation in rural Table 4.23 gives the Maharashtra ex-
general households. perience, where both the incidence
The incidence of poverty was lower and inten- the intensity of poverty in rural gen-
sity of poverty was same or lower in households eral households were lower than the
Table 4.23: Maharashtra – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor Poor Poor
1. General Households 6.98 16.74 23.72 12.86 13.95 26.81
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
2.. Households sustaining on employment in 2.19 9.38 11.57 16.20 16.76 32.96
informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)
in informal sector with only one female
8. Households sustaining on employment in 2.38 7.49 9.87 25.96 18.55 44.51
informal sector with only one male and
one female worker (15 years & above) (11.22) (19.38) (30.60) (15.77) (18.14) (33.91)
9. Female-headed households sustaining on 0.10 15.24 15.34 15.36 15.80 31.16
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
in informal sector with no female literate
11. Households sustaining on employment in 1.24 25.84 27.08 47.19 23.53 70.72
informal sector with no literate member
(15 years & above) (13.27) (24.16) (37.43) (28.74) (27.82) (56.56)

levels among general households in ru- incidence and intensity of poverty com-
ral India, with a very significant reduc- pared to the poverty situation in general
tion recorded in households sustaining households in the State.
on employment in the informal sector
Orissa
in non-agricultural activities.
As Table 4.24 shows, very high inci-
Households sustaining on regular wage/
dence and intensity of poverty were
salaried employment in informal sector
observed in general households in ru-
experienced lower incidence and inten-
ral areas vis-à-vis the national experi-
sity of poverty in urban Maharashtra
ence, but the corresponding levels were
compared to the situation in gener-
lower than in general rural households
al households. On the rural-urban lev-
where households sustaining employ-
el, clearly employment in non-agricultural in-
ment from the informal sector were
formal sector economic activities helped reduce
concerned.
both incidence and intensity of poverty in ru-
ral areas whereas in urban areas in most cas- In urban areas of Orissa, employment
es such employment resulted in increase of in informal sector economic activities
Table 4.24: Orissa – Poverty ratios during 1999-2000 among members

Rural Urban
S.
No.
Poor Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
above)
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
Figures in brackets are the corresponding ratios at national level.

did not result in reduction of the in- Punjab
cidence of poverty but in some cases
It will be observed from Table 4.25
helped in substantial reduction in the
that both the incidence and intensity
intensity of poverty, compared to the
poverty scenario in general households. of poverty in general households of
However, households sustaining on self-em- rural Punjab were substantially lower
ployment were seen to have a higher incidence than the corresponding ratios record-
and intensity of poverty in urban areas than in ed at the rural all-India level. Its ur-
rural areas, while overall these ratios were lower ban areas reported significantly lower
than those for the general households. incidence and intensity of poverty in
Table 4.25: Punjab – Poverty ratios during 1999-2000 among members

Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
(6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)
above)
only one male and one female worker (11.22) (19.38) (30.60) (15.77) (18.14) (33.91)
(15 years & above)
no female literate member (15 years & (9.21) (20.80) (30.01) (19.92) (23.98) (43.90)
above)
above)
N.A.: Not available. Figures in brackets are the corresponding poverty ratios at national level

general households compared to the poverty in general households were sub-
corresponding national figures. stantially lower than the corresponding
national figures.
Households sustaining on self-employment in
informal sector recorded lower incidence of pov- Urban Rajasthan experienced lower
erty both in rural and urban areas compared to poverty incidence and intensity in gen-
the incidence of poverty in general households. eral households compared to the re-
corded incidence and intensity of pov-
Rajasthan erty in urban India in general house-
In rural Rajasthan, as Table 4.26 indi- holds. On a rural-urban basis, households
cates, the incidence and intensity of sustaining on self-employment in informal
Table 4.26: Rajasthan – Poverty ratios during 1999-2000 among members

Rural Urban
S.
No.
Poor Poor Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
In informal sector (6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)
above)
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)

sector experienced lower incidence and in- Tamil Nadu
tensity of poverty compared to gener- In Table 4.27, it will be seen that house-
al households in both rural and urban holds sustaining on employment in
Rajasthan. non-agricultural informal sector eco-
Table 4.27: Tamil Nadu – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector (6.06) (15.82) (21.88) (10.98) (16.28) (27.26)
employment in informal sector (5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
salaried/wage employment in informal N.A.
sector (7.42) (14.15) (21.57)
5. Households sustaining on casual wage N.A. N.A. 18.51 21.41 39.92
N.A.
employment in informal sector (22.86) (24.20) (47.06)
8. Households sustaining on employment
in informal sector with only one male 10.67 3.14 13.81 16.49 15.74 32.23
above)
on employment in informal sector (5.74) (13.57) (19.31) (14.98) (17.73) (32.71)

nomic activities in rural Tamil Nadu informal sector enterprises did not help in re-
helped make a serious dent in the inci- duction of the incidence of poverty compared to
dence and intensity of poverty in com- the situation in general households.
parison with the poverty scenario in
West Bengal
general households.
In urban Tamil Nadu, employment The West Bengal experience in Table
in informal sector enterprises did not 4.29 (p.63) shows that its rural areas
result in any appreciable reduction in had a higher incidence and intensity of
both the incidence and intensity of poverty in general households than the
poverty when compared with the pov- all-India rural levels, but households
erty situation in general households. In sustaining on employment in informal
fact, there were cases where higher inci- sector experienced significantly low-
dence and intensity of poverty were ob- er ratios.
served. Except in the case of households sus-
Households sustaining on self-employment in taining on regular wage/salaried em-
non-agricultural informal sector enterprises re- ployment in informal sector in ur-
corded substantially lower incidence of pover- ban West Bengal there was a higher
ty in rural areas but only slightly lower inci- incidence and intensity of poverty in
dence of poverty in urban areas compared to households drawing their sustenance
general households. The same held true for from employment in informal sector
households sustaining on employment enterprises compared to the poverty sit-
in informal sector with only one adult uation in general households.
male worker.
On the rural-urban side, households with
Uttar Pradesh a single adult male worker saw signifi-
Table 4.28 (p.62) showing results relat- cantly lower incidence and intensity of
ing to Uttar Pradesh indicate that on poverty in the rural areas, but the ratios
the whole, in rural areas employment were slightly higher in the urban areas.
in non-agricultural informal sector en-
terprises did not help in reduction of Inter-State Comparisons
either incidence or intensity of pover- Table 4.30 brings together relevant in-
ty compared to the poverty situation in ter-state comparisons of poverty ratios
general households. among members of different types of
In urban Uttar Pradesh, employment in households during 1999-2000. An at-
informal sector enterprises resulted in tempt has been made to bring out as
higher incidence of poverty compared comprehensively as possible the com-
to the incidence of poverty in general parisons across States on the experience
households. In both rural and urban ar- among groups of households and in the
eas, indeed, employment in non-agricultural urban and rural areas of these States.

Table 4.28: Uttar Pradesh – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector (21.88)
(6.06) (15.82) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)
7. Households sustaining on employment 13.75 34.52 48.27 N.A. N.A. N.A.

above)
8. Female-headed households sustaining N.A. N.A. N.A. 11.76 26.67 38.43
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
The Table also records similar all-India Households sustaining on employ-

levels, wherever they obtain along with ment in the informal sector with
the States concerned. only one adult male worker in ru-
ral Andhra Pradesh, Bihar, Gujarat,
Success Stories Karnataka, Kerala, Madhya Pradesh,
Still, at the risk of repetition, some dis- Maharashtra, Orissa, Punjab, Rajas-
tinctive stories of poverty control as than, Tamil Nadu and West Bengal
they emerged from the data available in recorded both incidence and intensi-
NSS survey deserve special mention: ty of poverty less than or equal to the

Table 4.29: West Bengal – Poverty ratios during 1999-2000 among members
Rural Urban
S.
No.
Poor Poor
(8.65) (18.44) (27.09) (9.26) (14.36) (23.62)
in informal sector (21.88)
(6.06) (15.82) (10.98) (16.28) (27.26)
(5.92) (15.30) (21.22) (9.53) (15.18) (24.71)
sector (7.42) (14.15) (21.57)
(22.86) (24.20) (47.06)


above)
(5.74) (13.57) (19.31) (14.98) (17.73) (32.71)
corresponding poverty ratios in gen- dence as well as intensity of poverty in

eral households in the rural areas of households sustaining on employment
the respective States. in informal sector with only one adult
The rural areas of Andhra Pradesh female worker than the corresponding
had the distinction of a lower inci- poverty ratios in general households.

Households sustaining on employ- the corresponding poverty ratios in
ment in informal sector with only the general households in the State.
one adult male worker and one adult There were urban areas in parts of
female worker in the rural areas of the country where households sus-
Karnataka, Kerala, Maharashtra and taining on self-employment in infor-
Tamil Nadu recorded either lower or mal sector experienced poverty inci-
equal incidence of poverty compared dence either lower or equal to the in-
to the poverty incidence in general cidence of poverty in general house-
households in the rural areas of the holds in urban areas of the respec-
respective States. A similar compari- tive States. These States were Andhra
son was also valid in respect of the Pradesh, Gujarat, Haryana, Himachal
intensity of poverty in rural areas of Pradesh, Karnataka, Kerala, Madhya
Kerala and Maharashtra. Pradesh, Orissa, Punjab, Rajasthan
Female-headed households sustain- and Tamil Nadu. The same compar-
ing on employment in informal sec- ison held good for the intensity of
tor in rural Andhra Pradesh, Gujarat, poverty also in these States, except
Karnataka, Maharashtra and Tamil Himachal Pradesh and Punjab.
Nadu experienced incidence of pov- Urban Andhra Pradesh, Gujarat,
erty which was less than or equal Haryana, Karnataka, Kerala, Madhya
to the poverty incidence in general Pradesh and Tamil Nadu also report-
households in rural areas of the re- ed both incidence and intensity of
spective States. poverty in households sustaining on
Even households sustaining on em- employment in informal sector with
ployment in informal sector with no only one adult male worker that were
adult female literate member in the less than or equal to the correspond-
rural areas of Karnataka, Kerala, ing poverty ratios in general urban
Maharashtra, Orissa and Tamil Nadu households of the respective States.
experienced an incidence of poverty In the urban areas of Karnataka and
less than or equal to the poverty inci- Kerala, households sustaining on em-
dence in general households in rural ployment in informal sector with only
areas of the respective States. one adult female worker had an inci-
Gujarat had the distinction of being dence of poverty less than or equal to
the only State where the poverty in- that in general households in their re-
cidence in households sustaining on spective urban areas. Similarly, in the
employment in the informal sector in urban areas of Gujarat, Kerala and
urban areas was slightly less than that Tamil Nadu, households sustaining on
in general households. Also, both the employment in informal sector with
incidence and intensity of poverty in only one adult female worker experi-
female-headed households sustaining enced less than or as much intensity of
on employment in informal sector in poverty as that in general households
urban areas were less than or equal to in their respective urban areas.

In urban Karnataka, Kerala, Madhya the corresponding poverty ratios in
Pradesh, Maharashtra and West the general households.
Bengal, households sustaining on reg-
ular wage/salaried employment in the Poverty Ratio Variations
informal sector had an incidence as In both the rural and urban areas, there
well as intensity of poverty less than were several types of households sus-
or equal to the corresponding poverty taining on employment in informal sec-
ratios in general households in their re- tor in a number of States with higher in-
spective urban areas. cidence and intensity of poverty than
Another distinctive feature was ob- was the situation in general households.
served in urban Kerala, which had These were households engaged in in-
the distinction of both the inci- formal sector economic activities and
dence and intensity of poverty in suffering from higher levels of poverty
households sustaining on informal than in general households.
sector with no adult female literate All such cases can be identified from
member being less than or equal to Table 4.30.
Table 4.30: Inter-State comparisons of poverty ratios among members of different types of
households during 1999-2000.
States/India where the comparison was observed

Type of comparison of poverty
In Rural Areas In Urban Areas
ratios among different types of
households For Poverty For Poverty For Poverty For Poverty
Incidence Intensity Incidence Intensity
1. States where general Andhra Pradesh, Andhra Assam, Gujarat, Assam, Gujarat,
households poverty ratios were Gujarat, Haryana, Pradesh, Haryana, Himachal Haryana, Himachal
less than or equal to national Himachal Pradesh, Gujarat, Pradesh, Kerala, Pradesh, Kerala,
level Karnataka, Kerala, Haryana, Punjab, Rajasthan, Punjab, Rajasthan,
Maharashtra, Himachal Tamil Nadu, West Tamil Nadu, West
Punjab, Rajasthan, Pradesh, Bengal Bengal
Tamil Nadu Karnataka,
Kerala,
Maharashtra,
Punjab,
Rajasthan,
Tamil Nadu
2. States where general households Assam, Bihar, Assam, Bihar, Andhra Pradesh, Andhra Pradesh,
poverty ratios were more than Madhya Pradesh, Madhya Bihar, Karnataka, Bihar, Karnataka,
national level Orissa, Uttar Pradesh, Madhya Pradesh, Madhya Pradesh,
Pradesh, West Orissa, Uttar Maharashtra, Orissa, Maharashtra,
Bengal Pradesh, West Uttar Pradesh Orissa, Uttar
Bengal Pradesh

Table 4.30: contd...

3. States where poverty ratios Andhra Pradesh, Andhra Pradesh, Gujarat Orissa, Rajasthan
of households sustaining on Gujarat, Karnataka, Gujarat,
employment in informal sector were Kerala, Madhya Karnataka, Kerala,
less than or equal to poverty ratios Pradesh, Maharashtra,
in general households Maharashtra, Orissa, Orissa, Punjab,
Punjab, Tamil Nadu, Tamil Nadu, West
West Bengal, India Bengal, India
4. States where poverty ratios Assam, Bihar, Assam, Bihar, Andhra Pradesh, Andhra Pradesh,
of households sustaining on Haryana, Himachal Haryana, Assam, Bihar, Assam, Bihar,
employment in informal sector Pradesh, Rajasthan, Himachal Pradesh, Haryana, Gujarat, Haryana,
were more than poverty ratios in Uttar Pradesh Madhya Pradesh, Himachal Himachal
general households Rajasthan, Uttar Pradesh, Pradesh,
Pradesh Karnataka, Karnataka, Kerala,
Kerala, Madhya Madhya Pradesh,
Pradesh, Maharashtra,
Maharashtra, Punjab, Tamil
Orissa, Punjab, Nadu, Uttar
Rajasthan, Tamil Pradesh, West
Nadu, Uttar Bengal, India
Pradesh, West
Bengal, India
5. States where poverty ratios of Andhra Pradesh, Andhra Pradesh, Andhra Pradesh, Andhra Pradesh,
households sustaining on self- Assam, Bihar, Assam, Bihar, Gujarat, Gujarat, Haryana,
employment in informal sector Gujarat, Haryana, Gujarat, Haryana, Haryana, Karnataka, Kerala,
were less than or equal to poverty Himachal Pradesh, Karnataka, Kerala, Himachal Madhya Pradesh,
ratios in general households Karnataka, Kerala, Maharashtra, Pradesh, Orissa, Rajasthan,
Madhya Pradesh, Orissa, Punjab, Karnataka, Tamil Nadu
Maharashtra, Orissa, Rajasthan, Tamil Kerala, Madhya
Punjab, Rajasthan, Nadu, West Pradesh,
Tamil Nadu, West Bengal, India Orissa, Punjab,
Bengal, India Rajasthan, Tamil
Nadu
6. States where poverty ratios of Uttar Pradesh Himachal Pradesh, Assam, Bihar, Assam, Bihar,
households sustaining on self- Madhya Pradesh, Maharashtra, Himachal
employment in informal sector Uttar Pradesh Uttar Pradesh, Pradesh,
were more than poverty ratios in West Bengal, Maharashtra,
general households India Punjab, Uttar
Pradesh, West
Bengal, India

Type of comparison of
poverty ratios among
different types of households For Poverty For Poverty For Poverty For Poverty
7. States where poverty Andhra Pradesh, Andhra Pradesh, Andhra Pradesh, Andhra Pradesh,
ratios of households Bihar, Gujarat, Bihar, Gujarat, Gujarat, Haryana, Gujarat, Haryana,
sustaining on employment Karnataka, Kerala, Karnataka, Kerala, Karnataka, Kerala, Karnataka, Kerala,
in informal sector with Madhya Pradesh, Madhpra Pradesh, Madhya Pradesh, Madhya Pradesh,
only one adult male worker Maharashtra, Maharashtra, Tamil Nadu Orissa, Rajasthan,
were less than or equal to Orissa, Punjab, Orissa, Punjab, Tamil Nadu
poverty ratios in general Rajasthan, Tamil Rajasthan, Tamil
households Nadu, West Bengal, Nadu, West
India Bengal, India
8. States where poverty Assam, Haryana, Assam, Haryana, Assam, Bihar, Assam, Bihar,
ratios of households Himachal Pradesh, Himachal Pradesh, Himachal Pradesh, Himachal Pradesh,
sustaining on employment Uttar Pradesh Uttar Pradesh Maharashtra, Orissa, Maharashtra,
in informal sector with only Punjab, Rajasthan, Punjab, Uttar
one adult male worker were Uttar Pradesh, West Pradesh, West
more than poverty ratios in Bengal, India Bengal, India
general households
9. States where poverty Andhra Pradesh Andhra Pradesh, Karnataka, Kerala Gujarat, Kerala,
ratios of households Bihar, India Tamil Nadu
sustaining on employment
in informal sector with
only one adult female worker
were less than or equal to
poverty ratios in general
households
10. States where poverty Assam, Bihar, Assam, Kerala, Andhra Pradesh, Andhra Pradesh,
ratios of households Kerala, Tamil Nadu, Tamil Nadu, West Bihar, Gujarat , Bihar, Karnataka,
sustaining on employment West Bengal, India Bengal Madhya Pradesh, Madhya Pradesh,
in informal sector with only Maharashtra, Tamil Maharashtra, West
one adult female worker were Nadu, West Bengal, Bengal, India
more than poverty ratios in India
general households
11. States where poverty Karnataka, Kerala, Kerala,
ratios of households Maharashtra, Tamil Maharashtra
sustaining on employment Nadu
in informal sector with
only one adult male worker – –
and one adult female worker
were less than or equal to
poverty ratios in general
households

12. States where poverty ratios Andhra Pradesh, Andhra Pradesh, Andhra Pradesh, Andhra Pradesh,
of households sustaining on Bihar, Gujarat, Bihar, Gujarat, Bihar, Gujarat, Bihar, Gujarat,
employment in informal sector Madhya Pradesh, Karnataka, Haryana, Haryana,
with only one adult male worker and Orissa, Rajasthan, Madhya Pradesh, Karnataka, Karnataka,
one adult female worker were more Uttar Pradesh, West Orissa, Rajasthan, Kerala, Madhya Kerala, Madhya
than poverty ratios in general Bengal, India Tamil Nadu, Uttar Pradesh, Pradesh,
households Pradesh, West Maharashtra, Maharashtra,
Bengal, India Orissa, Punjab, Orissa, Punjab,
Rajasthan, Tamil Rajasthan, Tamil
Nadu, West Nadu, West
Bengal, India Bengal, India
13. States where poverty ratios of Andhra Pradesh, Andhra Pradesh, Gujarat Gujarat, Orissa,
female-headed households sustaining Gujarat, Karnataka, Assam, Bihar, Uttar Pradesh
on employment in informal Maharashtra, Tamil Gujarat,
sector were less than or equal Nadu, India Karnataka,
to poverty ratios in general Maharashtra,
households Orissa, India
14. States where poverty ratios Assam, Bihar, Kerala, Rajasthan, Anddhra Pradesh, Andhra Pradesh,
of female-headed households Kerala, Orissa, Tamil Nadu, West Bihar, Karnataka, Bihar, Karnataka,
sustaining on employment Rajasthan, West Bengal Kerala, Madhya Kerala, Madhya
in informal sector were more Bengal Pradesh, Pradesh,
than poverty ratios in general Maharashtra, Maharashtra,
households Orissa, Rajasthan, Rajasthan, Tamil
Tamil Nadu, Nadu, West
Uttar Pradesh, Bengal, India
West Bengal,
India
15. States where poverty ratios Karnataka, Kerala, Maharashtra, Kerala Kerala
of households sustaining on Maharashtra, Orissa, Punjab
employment in informal sector Orissa, Tamil Nadu
with no adult female literate member
were less than or equal to poverty
ratios in general households
16. States where poverty ratios Andhra Pradesh, Andhra Pradesh, Andhra Pradesh, Andhra Pradesh,
of households sustaining on Assam, Bihar, Assam, Bihar, Assam, Bihar, Assam, Bihar,
employment in informal sector Gujarat, Haryana, Gujarat, Haryana, Gujarat, Haryana, Gujarat, Haryana,
with no adult female literate member Himachal Pradesh, Himachal Pradesh, Himachal Himachal
were more than poverty ratios in Madhya Pradesh, Karnataka, Kerala, Pradesh, Pradesh,
general households Punjab, Rajasthan, Madhya Pradesh, Karnataka, Karnataka,
Uttar Pradesh, West Rajasthan, Tamil Madhya Pradesh, Madhya Pradesh,
Bengal, India Nadu, Uttar Maharashtra, Maharashtra,
Pradesh, West Orissa, Punjab, Orissa, Punjab,
Bengal, India Rajasthan, Tamil Rajasthan, Tamil
Nadu, Uttar Nadu, Uttar
Pradesh, West Pradesh, West
Bengal, India Bengal, India

households For Poverty For Poverty For Poverty Incidence For Poverty Intensity
Incidence Intensity
17. States where poverty ratios Maharashtra,
of households sustaining Orissa, Punjab
on employ ment in informal
sector with no adult literate – – –
member were less than or equal
to poverty ratios in general
households
18. States where poverty ratios Anddhra Pradesh, Andhra Pradesh, Andhra Pradesh, Andhra Pradesh,
of households sustaining Assam, Bihar, Assam, Bihar, Bihar, Gujarat, Bihar, Gujarat,
on employment in informal Gujarat, Haryana, Gujarat, Haryana, Haryana, Karnataka, Haryana, Karnataka,
sector with no adult literate Karnataka, Karnataka, Madhya Pradesh, Madhya Pradesh,
member were more than Madhya Pradesh, Madhya Pradesh, Maharashtra, Orissa, Maharashtrza, Orissa,
poverty ratios in general Maharashtra, Rajasthann, Tamil Punjab, Rajasthan, Punjab, Rajasthan,
households Orissa, Punjab, Nadu, Uttar Tamil Nadu, Uttar Tamil Nadu, Uttar
Rajasthan, Tamil Pradesh, West Pradesh, West Bengal, Pradesh, India
Nadu, Uttar Bengal, India India
Pradesh, West
Bengal, India
19. States where poverty ratios N.A. N.A. Gujarat, Karnataka, Andhra Pradesh,
of households sustaining Kerala, Madhya Karnataka, Kerala,
on regular wage/salaried Pradesh, Maharashtra, Madhya Pradesh,
employment in informal West Bengal, India Maharashtra,
sector were less than or equal Rajasthan, Uttar
to poverty ratios in general Pradesh, West Bengal,
households India
20. States where poverty ratios N.A. N.A. Andhra Pradesh, Gujarat, Punjab, Tamil
of households sustaining Punjab, Rajasthan, Nadu
on regular wage/salaried Tamil Nadu, Uttar
employment in informal sector Pradesh
were more than poverty ratios
in general households
21. States where poverty ratios N.A. N.A.
of households sustaining
on casual wage employment in
– –
informal sector were less than
or equal to poverty ratios in
general households
22. States where poverty ratios N.A. N.A. Andhra Pradesh, Andhra Pradesh,
of households sustaining Gujarat, Karnataka, Gujarat, Karnataka,
on casual wage employment in Kerala, Madhya Kerala, Madhya
informal sector were more Pradesh, Maharashtra, Pradesh, Maharashtra,
than poverty ratios in general Punjab, Rajasthan, Punjab, Rajasthan,
households Tamil Nadu, Uttar Tamil Nadu, Uttar
Pradesh, West Bengal, Pradesh, West Bengal,
India India
N.A. : Not Available.

Tables 4.31 and 4.32 present in a sum- in the intensity of poverty (percent)
marised format inter-state variation during 1999-2000 among members of
in the incidence of poverty (percent) different types of households (a) in
among members of different types of rural areas with the ranges for the in-
households, separately in rural and ur- tensity of poverty taken as 0 to 5, 5 to
ban areas, wherein the ranges for inci- 10, 10 to 15, 15 to 20, 20 to 30, and 30
dence of poverty are taken as 0 to 10, to 40; and (b) in urban areas with the
10 to 20, 20 to 30, 30 to 40, 40 to 50 and ranges taken as 0 to 5, 5 to 10, 10 to
50 + (50 and above). 15, 15 to 20, 20 to 30, 30 to 40, 40 to
Table 4.33 and 4.34 present in a sum- 50 and 50 + (50 and above).
marised format inter-state variation
Table 4.31: Inter-state variation in the incidence of poverty (%) during 1999-2000 among members of
different types of households (Rural India)
Type of States/India where the incidence of poverty (%) was in the range
Household 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50+
1. General Haryana, Andhra Maharashtra, Assam, Bihar, Orissa
Households Himachal Pradesh, Tamil Nadu, Madhya
Pradesh, Kerala, Gujarat, India Pradesh,
–
Punjab Karnataka, Uttar
Rajasthan Pradesh,
West Bengal
2. Households Andhra Pradesh, Haryana, West Bengal, Madhya Assam, Bihar
sustaining on Gujarat, Maharashtra, India Pradesh,
employment in Himachal Rajasthan, Orissa, Uttar
–
informal sector Pradesh, Tamil Nadu Pradesh
Karnataka,
Kerala, Punjab
3. Households Andhra Pradesh, Maharashtra, Madhya Assam, Bihar
sustaining on Gujarat, Tamil Nadu Pradesh, West Orissa, Uttar
self-employment Haryana, Bengal, India Pradesh
in informal Himachal
–
sector Pradesh,
Karnataka,
Kerala, Punjab,
Rajasthan
4. Households N.A. N.A. N.A. N.A. N.A. N.A.
sustaining
on regular
wage/salaried
employment in
informal sector
sustaining on
casual wage
employment in
informal sector

household 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50+
6. Households Andhra Himachal Madhya Orissa, Assam, Bihar
sustaining on Pradesh, Pradesh, Pradesh, Uttar
employment Gujarat, Maharashtra, West Bengal, Pradesh
in informal Haryana, Rajasthan India
–
sector with only Karnataka,
one adult male Kerala,
worker Punjab,
Tamil Nadu
7. Households Andhra Kerala, Tamil Assam, Bihar,
sustaining on Pradesh Nadu, India West Bengal
employment in
informal sector – – –
with only one
adult female
worker
8. Households Kerala, Andhra Rajasthan West Bihar, Uttar Madhya
sustaining on Maharashtra Pradesh, Bengal, Pradesh Pradesh, Orissa
employment in Gujarat, India
informal sector Karnataka,
with only one Tamil Nadu
adult male and
one adult female
worker
9. Female-headed Andhra Kerala, Rajasthan Assam, West Bihar
households Pradesh, Tamil Nadu, Bengal, Orissa
sustaining on Karnataka, Maharashtra, –
employment in Gujarat India
informal sector
10. Households Kerala, Andhra India Madhya Bihar, Orissa Assam
sustaining on Punjab Pradesh, Pradesh,
employment in Gujarat, Uttar
informal sector Haryana, Pradesh,
with no adult Himachal West Bengal
female literate Pradesh,
member Karnataka,
Maharashtra,
Rajasthan,
Tamil Nadu
11. Households Punjab Andhra Karnataka, Rajasthan, Madhya Pradesh, Assam, Bihar
sustaining on Pradesh, Maharashtra, India Orissa, Uttar
employment in Gujarat, Tamil Nadu Pradesh, West
informal sector Haryana Bengal
with no adult
literate member

Table 4.32: Inter-state variation in the incidence of poverty (%) during 1999-2000 among members of
different types of households (Urban India)
1. General Assam, Gujarat, Andhra Bihar, Orissa
Households Haryana, Rajasthan, Pradesh, Madhya
Himachal West Bengal Karnataka, Pradesh,
Pradesh, Kerala, Uttar Pradesh –
Punjab Maharashtra,
Tamil Nadu,
India
2. Households Himachal Assam, Andhra Madhya Bihar,
sustaining on Pradesh, Gujarat, Pradesh, Pradesh, Orissa
employment in Punjab Haryana, Karnataka, Maharashtra,
informal sector West Bengal Kerala, Uttar Pradesh –
Rajasthan,
Tamil Nadu,
India
3. Households Haryana, Assam, Andhra Madhya Bihar,
sustaining on Himachal Gujarat, Pradesh, Pradesh, Orissa
self-employment Pradesh, Kerala, Karnataka, Uttar Pradesh
–
in informal Punjab Rajasthan, Maharashtra,
sector West Bengal Tamil Nadu,
India
4. Households Punjab, West Gujarat, Andhra Madhya
sustaining Bengal Kerala Pradesh, Pradesh,
on regular Karnataka, Uttar Pradesh
wage/salaried Maharashtra, – –
employment in Rajasthan,
informal sector Tamil Nadu,
India
5. Households Punjab Gujarat Kerala, Tamil Andhra Madhya Pradesh,
sustaining on Nadu, West Pradesh, Mahara-shtra,
casual wage – Bengal Karnataka, Rajasthan, Uttar
employment in India Pradesh
informal sector
6. Households Assam, Gujarat, Andhra Bihar, Orissa
sustaining on Haryana, Kerala, West Pradesh, Madhya
employment Himachal Bengal Karnataka, Pradesh,
in informal Pradesh, Maharshtra, Uttar Pradesh –
sector with only Punjab Rajasthan,
one adult male Tamil Nadu,
worker India
7. Households Kerala Gujarat, Maharashtra, Andhra Bihar, Madhya
sustaining on Karnataka, India pradesh Pradesh
employment in Tamil Nadu,
informal sector – West Bengal
with only one
adult female
worker

8. Households Punjab Haryana Kerala Andhra Madhya Bihar, Orissa
sustaining on Pradesh, Pradesh,
employment in Gujarat, Maharashtra
informal sector Karnataka,
with only one Rajasthan,
adult male and Tamil Nadu,
one adult female West Bengal,
worker India
9. Female-headed Gujarat West Bengal Karnataka, Madhya Andhra
households Kerala, Pradesh, Pradesh, Bihar
sustaining on Maharashtra, Orissa,
employment in – Tamil Rajasthan
informal sector Nadu, Uttar
Pradesh,
India
10. Households Haryana, Assam Gujarat, Andhra Bihar,
sustaining on Himachal Rajasthan, Pradesh, Karnataka,
employment in Pradesh, Tamil Nadu, Maharashtra, Madhya
informal sector – Kerala, Punjab West Bengal Uttar Pradesh, Pradesh, Orissa
with no adult India
female literate
member
11. Households Haryana, Gujarat Tamil Nadu, Andhra
sustaining on Punjab West Bengal Pradesh, Bihar,
employment in Karnataka,
informal sector Madhya
with no adult – – Pradesh,
literate member Maharashtra,
Orissa,
Rajasthan, Uttar
Pradesh, India
Table 4.33: Inter-state variation in the intensity of poverty (%) during 1999-2000 among members
of different types of households (Rural India)
Type of States/India where the intensity of poverty (%) was in the range
household 0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40
1. General Andhra Pradesh, Maharashtra, Bihar, Madhya Assam Orissa
Households Gujarat, Tamil Nadu, Pradesh, West
Haryana, Uttar Pradesh, Bengal
Himachal India
_
Pradesh,
Karnataka,
Kerala, Punjab,
Rajasthan

household 0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40
2. Households Andhra Pradesh, Himachal Madhya Pradesh, Assam, Bihar
sustaining on Gujarat, Pradesh, Tamil Orissa, Uttar
employment in Haryana, Nadu, West Pradesh
informal sector Karnataka, Bengal, India
– –
Kerala,
Maharashtra,
Punjab,
Rajasthan
3. Households Andhra Pradesh, Tamil Nadu, Assam, Bihar,
sustaining on Gujarat, Uttar Pradesh, Madhya Pradesh,
self-employment Haryana, West Bengal, Orissa
in informal Himachal India
sector Pradesh,
– – –
Karnataka,
Kerala,
Maharashtra,
Punjab,
Rajasthan
sustaining
on regular
wage/salaried
employment in
informal sector
sustaining on
casual wage
employment in
informal sector
6. Households Andhra Pradesh, Himachal Bihar, Madhya Assam
sustaining on Gujarat, Pradesh, Pradesh, Uttar
employment Haryana, Orissa, West Pradesh
in informal Karnataka, Bengal
sector with only Kerala, – –
one adult male Maharashtra,
worker Punjab,
Rajasthan, Tamil
Nadu, India
7. Households Andhra Pradesh Bihar, India Kerala, Tamil Assam West --
sustaining on Nadu Bengal
employment in
informal sector
with only one
adult female
worker

Household 0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40
8. Households Gujarat, Andhra Tamil Nadu, Bihar, Orissa Madhya
sustaining on Kerala, Pradesh, Uttar Pradesh, Pradesh
employment Maharashtra Karnataka, West Bengal,
in informal Rajasthan India
–
sector with only
one adult male
and one adult
female workers
9. Female-headed Andhra Tamil Nadu, Assam, Bihar, Orissa West Bengal
households Pradesh, India Rajasthan
sustaining on Gujarat,
–
employment in Karnataka,
informal sector Kerala,
Maharashtra
10. Households Gujarat, Andhra Orissa, Uttar Bihar, Assam
sustaining on Haryana, Pradesh, Pradesh, West Madhya
employment in Karnataka, Himachal Bengal Pradesh
informal sector Kerala, Pradesh, –
with no adult Punjab, Maharashtra,
female literate Rajasthan Tamil Nadu,
member India
11. Households Gujarat, Andhra Tamil Nadu, Orissa, Uttar Assam, Bihar,
sustaining on Maharashtra, Pradesh, India Pradesh Madhya
employment in Punjab Haryana, Pradesh,
–
informal sector Karnataka, West Bengal
with no adult Rajasthan
literate member
Table 4.34: Inter-state variation in the intensity of poverty (%) during 1999-2000 among members
of different types of households (Urban India)
Household 0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40 40 to 50 50 +
1. General Assam, Andhra Bihar, Madhya Orissa
Households Gujarat, Pradesh, Karnataka, Pradesh
Haryana, Kerala, Mahara-
Himachal Rajasthan, shtra, Uttar – – –
Pradesh, Tamil Nadu, Pradesh
Punjab, West India
Bengal
2. Households Gujarat, Assam, Andhra Madhya Bihar,
sustaining on Haryana, Kerala, Pradesh, Pradesh, Orissa
employment in Himachal Tamil Nadu, Karnataka, Mahara-
– – –
informal sector Pradesh, West Bengal IIndia shtra,
Punjab, Uttar
Rajhasthan Pradesh

Household 0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40 40 to 50 50 +
3. Households Gujarat, Andhra Assam, Orissa Bihar
sustaining on Haryana, Pradesh, Madhya
self-employment Himachal Karnataka, Pradesh,
in informal Pradesh, Kerala, Mahara-
– – –
sector Punjab, Tamil shtra, Uttar
Rajasthan Nadu, West Pradesh
Bengal,
India
4. Households Punjab, West Andhra Madhya
sustaining Bengal Pradesh, Pradesh
on regular Gujarat,
wage/salaried Karnataka,
employment in Kerala,
informal sector Mahara-
– – – – –
shtra,
Rajasthan,
Tamil
Nadu, Uttar
Pradesh,
India
5. Households Punjab Gujarat, Kerala Andhra Karna- Madhya
sustaining on Rajasthan Pradesh, taka, Pradesh,
casual wage Tamil India Maha-
– –
employment in Nadu, rashtra,
informal sector West Uttar
Bengal Pradesh
6. Households Gujarat, Andhra Mahara- Bihar, Orissa
sustaining on Haryana, Pradesh, shtra, Uttar Madhya
employment Himachal Assam, Pradesh Pradesh
in informal Pradesh, Karnataka,
– – –
sector with only Punjab, Kerala,
one adult male Rajasthan Tamil Nadu,
worker West Bengal,
India
7. Households Gujarat Kerala, Andhra West Mahara- Madhya Bihar
sustaining on Tamil Nadu Pradesh, Bengal, shtra Pradesh
employment in Karnataka India
informal sector –
with only one
adult female
worker
8. Households Gujarat, Andhra Karna- Madhya Bihar,
sustaining on Kerala, Pradesh, taka, Pradesh, Orissa
employment in Punjab Haryana, Tamil Mahara-
informal sector Rajasthan, Nadu, shtra
– – –
with only one West India
adult male and Bengal
one adult female
worker

States/India where the intensity of poverty (%) was in the range
Type of Household
0 to 5 5 to 10 10 to 15 15 to 20 20 to 30 30 to 40 40 to 50 50 +
9. Female-headed Gujarat Rajasthan Kerala, Karna- Andhra Bihar
households Orissa, taka, Pradesh,
sustaining on Tamil Mahara- Madhya
employment in Nadu, shtra Pradesh
informal sector Uttar – –
Pradesh,
West
Bengal,
India
10. Households Haryana, Assam, Andhra Bihar, Madhya
sustaining on Himachal Gujarat, Pradesh, Karnaa- Pradesh,
employment in Pradesh, Tamil West taka, Orissa
informal sector – Kerala, Nadu Bengal, Mahara- – –
with no adult Punjab, India shtra,
female literate Rajasthan Uttar
member Pradesh
11. Households Haryana Punjab Rajasthan Gujarat, Andhra Karna- Bihar,
sustaining on Tamil Pradesh, taka Madhya
employment in Nadu Uttar Pradesh,
informal sector Pradesh, Mahara- –
with no adult West shtra,
literate member Bengal, Orissa
India
Concluding Remarks Another interesting observation is that

poverty is related more to the nature of
The NSS has based its measures of em-
employment, rather than to the abso-
ployment on the time disposition of the
lute rate of employment. That is clear-
labour force, so the level of income or
ly why the incidence of poverty is high-
consumption of those who are count-
est among agricultural labourers in rural
ed as employed do not find reflection
areas and casual workers in urban areas.
in these indicators. An analysis of those
Agricultural labourers in rural areas are al-
employed by the level of consumption
so casual workers. It is among this cate-
expenditure helps to discern the extent
gory of workers that non-availability of
of poverty among them. Clearly, there
work from time to time (or high incidence
is a much larger incidence of poverty
of under-employment) leads to low in-
than the incidence of unemployment.
come and high incidence of poverty.
Naturally, the poor cannot afford to stay
unemployed, and opt for opportuni- The informal sector clearly affords a
ties that do not adequately address their better chance to earn more decent in-
economic needs and may be barely suf- comes. The approach and policies to-
ficient for sustenance – sometimes even wards the informal sector acquire sig-
not even that. nificance in this context.

ANNEXURE
Informal Employment: Evolving Perspectives
In January 1993, the 15th International registered under specific forms of

Conference of Labour Statisticians national legislation (such as factories
(ICLS) organised by ILO defined ‘infor- or commercial acts, tax or social secu-
mal sector enterprises’ on the basis of rity laws, professional groups’ regula-
the following criteria: tory acts, or similar acts, laws or regu-
They are private unincorporated en- lations established by national legisla-
terprises (excluding quasi-corpora- tive bodies as distinct from local reg-
tions), i.e. enterprises owned by in- ulations for issuing trade licenses or
dividuals or households that are not business permits), and/or their em-
constituted as separate legal entities ployees (if any) are not registered.
independently of their owners, and They are engaged in non-agricultur-
for which no complete accounts are al activities, including secondary non-
available that would permit a finan- agricultural activities of enterprises in
cial separation of the production ac- the agricultural sector. (This recom-
tivities from the other activities of its mendation, to exclude agricultural
owners. Private unincorporated en- and related activities from the scope
terprises include unincorporated en- of the informal sector and to meas-
terprises owned and operated by in- ure them separately, was made for
dividual household members or by practical data collection reasons rath-
several members of the same house- er than on conceptual grounds).
hold, as well as unincorporated part- In February 1993, the 15th ICLS resolu-
nerships and cooperatives formed by tion on informal sector statistics was en-
members of different households, if dorsed by the United Nations Statistical
they lack complete sets of accounts. Commission (UNSC) and the infor-
All, or at least some, of the goods or mal sector definition adopted by the
services produced are meant for sale 15th ICLS formed part of the United
or barter, with the possible inclusion Nations Revised System of National
in the informal sector of households Accounts (SNA 1993). This is because
producing domestic or personal serv- one of the new features of the SNA
ices in employing paid domestic 1993 is the recommendation to intro-
employees. duce, where relevant, sub-classifications
Their size, in terms of employment, of the households sector, including a
is below a certain threshold to be de- distinction between the formal and in-
termined according to national cir- formal sectors. Such a distinction makes
cumstances, and/or they are not it possible for the national accounts to

quantify the contribution of the infor- of the 1993 SNA as also the resolu-
mal sector to the national economy. tions of ICLS held by ILO from time
to time.
The Delhi Group
The first meeting of the Group was
Further, against the backdrop of rap-
held in May 1997 at New Delhi and the
id expansion and speedy growth wit-
sixth meeting in September, 2002 at Rio
nessed in several countries, especial-
de Janeiro, Brazil. The sixth meeting,
ly the developing ones, with regard to
among other things recommended that
the dimension and range of activities
and operations in the informal sector, (a) Further research may be done for
and given the fact that India had ac- evolving a statistical definition of
quired considerable experience in de- informal employment and methods
veloping data bases needed for measur- of compiling informal employment
ing the contribution of this vital sector statistics through labour force sur-
to its national economy, a decision was veys and
taken by the UNSC to constitute an in- (b) Countries undertaking combined la-
ternational ‘Expert Group on Informal bour force and expenditure surveys
Sector Statistics’, often referred to as the may undertake further research to
‘Delhi Group’, under the Chairmanship evolve methodologies for linking
of Secretary (Statistics) of Government poverty estimates and informal sec-
of India. tor employment.
The primary purpose underlying the The seventh meeting of the Delhi
constitution of this City (Delhi) Group Group was held on 2-4 February, 2004,
is facilitating the exchange of knowl- in New Delhi. The main national lev-
edge and experience between coun- el results presented here were included
tries, international organisations and in a Discussion Paper prepared for the
other concerned agencies in regard to seventh meeting of the Delhi Group.
the measurement of the size of the in-
formal sector and its contribution to an Agreed International Definition
economy, as also to prepare a status re- It is important to recognise the circum-
port, and indicating the future work stances in which the 15th ICLS adopted
programme. an international statistical definition of
the informal sector that was subsequent-
Data Collection & Survey Design
ly referred to in the revised SNA 1993.
Among other things, the objectives of In order to obtain an internationally
this Group include documenting the agreed definition of the informal sec-
data collection practices with regard to tor, which was acceptable to labour stat-
the informal sector as adopted in differ- isticians as well as national accountants,
ent countries and developing suitable the informal sector had to be defined in
methodologies for survey design and terms of characteristics of the produc-
collection of data concerning this section units (enterprises) in which the ac-
tor, keeping in view the requirements tivities take place (enterprise approach)
Informal Employment: Evolving Perspectives 79

proach), rather than in terms of the persons by status in employment, such
characteristics of the persons involved as outworkers, sub-contractors, free-
or of their jobs (labour approach). lancers or other workers whose activi-
‘Employment in the informal sector’ was ties are at the borderline between self-
thus defined as including all jobs in the employment and wage employment.
informal sector enterprises or all persons Women are more likely than men to be
who, during a given reference period, engaged in such activities.
were employed in at least one informal Still another criticism is that an enter-
sector enterprise, irrespective of their prise-based definition of the informal
status in employment and whether it was sector is unable to capture all aspects of
their main or a secondary job. The term an increasing ‘informalisation’ of em-
‘enterprise’, as used here, is to be under- ployment, which has led to a rise in var-
stood in a broad sense, referring to any ious forms of non-standard, atypical,
unit engaged in the production of goods alternative, irregular, precarious, etc.,
or services for sale or barter. forms of employment in parallel to the
It covers not only production units, growth of the informal sector that can
which employ hired labour, but also pro- be observed in many countries.
duction units that are owned and oper- Informalisation of Employment
ated by single individuals working on
their own account as self-employed per- As a matter of fact, the informal sec-
sons, either alone or with the help of un- tor definition adopted by the 15th ICLS
paid family members. The activities may was not meant to serve this purpose.
be undertaken inside or outside the en- Informalisation of employment in the
terprise owner’s home, and they may be formal sector is closely associated with
the increasing globalisation of an econo-
carried out in identifiable premises, uni-
my and the consequent competitive pres-
dentifiable premises or without fixed lo-
sures on formal sector enterprises. As a
cation. Accordingly, self-employed street
result, the boundary between the infor-
vendors, taxi drivers, home-based work-
mal and the formal sectors increasingly
ers, etc., are all considered enterprises.
blurs. It is, therefore, sometimes argued
Some Criticisms that the concept of the ‘informal sector’
A criticism sometimes made of meas- is no longer valid and that it needs to be
urements based on the informal sec- replaced by other concepts, such as that
tor definition is that persons engaged in of an ‘informal economy’.
very small-scale or casual self-employ- Taking note of the above criticisms,
ment activities may not report in statis- and after detailed discussions, the Delhi
tical surveys that they are self-employed, Group in its fifth meeting held at Delhi
or employed at all, although their activi- in September 2001 concluded that “the
ties fall within the enterprise definition. concept of informal employment is dis-
Another criticism is that informal sec- tinct from the concept of employment in
tor statistics may be affected by errors in the informal sector”. Informal employ-
classifying certain groups of employed ment (to be defined in terms of charac-

teristics of jobs) extends from the infor- total number of informal jobs, or the
mal sector (defined in terms of charac- total number of persons engaged in in-
teristics of enterprises) to other sectors. formal jobs, during a given reference
period. In other words, informal em-
The definition and measurement of em-
ployment comprises employment in the
ployment in the informal sector need to
informal sector (minus formal jobs of
be complemented with a definition and
employees in informal sector enterpris-
measurement of informal employment.
es, if relevant), plus jobs of contribut-
A concept of informal employment is
ing family workers and informal jobs of
considered to be relevant not only for
employees in other sectors, plus the ac-
developing and transition countries, but
tivities of persons engaged in the own-
also for other countries, for many of
account production of goods for own
which the concept of the informal sec-
final use by their households.
tor is of limited relevance.
Testing The Conceptual
Useful Concepts
Framework
‘Employment in the informal sector’ and The Delhi Group recommended in its
‘informal employment’ are both con- fifth meeting that the conceptual frame-
cepts that are useful for analytical and work proposed by ILO on informal em-
policy-making purposes, as they refer to ployment be tested by countries on the
different aspects of the ‘informalisation’ basis of available data with them.
of employment and to different targets
for policy-making. Neither of the two Subsequently, the ILO Report on
concepts can replace the other. However, “Decent Work and the Informal
Economy”, which was prepared for
the two concepts need to be defined and
discussion by the International Labour
measured in a consistent and clearly dis-
Conference (ILC) at its session held in
tinguishable manner. Statistical users and
2002, considered the ‘informal economy’
others often tend to confuse the two
as comprising: (i) employment in the in-
concepts because they are unaware of
formal sector, and (ii) other forms of in-
the different observation units involved
formal employment (i.e., informal em-
(enterprises versus jobs).
ployment outside the informal sector).
For the time being, there is no interna-
The ILC (2002) requested the ILO to
tionally agreed definition for the statis-
“assist member States to collect, analyse
tical measurement of ‘informal employ-
and disseminate consistent, disaggre-
ment’, as this aspect has not yet been
gated statistics on the size, composition
defined or adequately addressed in sta- and contribution of the informal econ-
tistics at the national level. During the omy that will help enable identification
fifth meeting of the Delhi Group in of specific groups of workers and eco-
September 2001, ILO presented a pro- nomic units and their problems in the
posal for defining informal employment. informal economy and that will inform
Broadly, the term ‘informal employ- the formulation of appropriate policies
ment’ was proposed to refer to the and programmes”.

Instruments of Definition It would, however, be useful if the defi-
nition of informal employment were ap-
Labour force surveys appear to be the
plied and tested by more countries in or-
most appropriate survey instruments
der to be able to revise it, if necessary.
for applying the definition of informal
employment proposed by the ILO. If An issue that needs to be addressed in
additional questions need to be added specifying the definition of informal
to a labour force survey questionnaire jobs in operational terms is the possible
in order to identify informal jobs, their discrepancy between the formality of
number will be low. employment situations and their reality.
Sometimes workers, although in theory
The Delhi Group at its sixth meeting in protected by labour legislation, covered
2002 considered some test exercises on by social security, entitled to employ-
the framework proposed by ILO and rec- ment benefits, etc., are in practice not in
ommended that “further research may be a position to claim their rights because
done for evolving a suitable definition of mechanisms to enforce the existing reg-
informal employment and methods of ulations are lacking or deficient.
compiling informal employment statis-
tics through labour force surveys”. Governance Issue
In December 2003, ILO presented a The question then arises as to what

detailed description on ‘Statistics of in- should be the aspect to be measured:
formal employment’, at the 17th ICLS The legal situation, or the actual situa-
tion? There are good reasons for choos-
along with the proposed conceptual
ing the latter, because in such situations
framework for measurement of infor-
the existence of informal employment is
mal employment. It also reported that
to a large extent a governance problem.
several countries have already tested the
framework and the results of the tests In the proposed future work of ILO, at
have been encouraging. the 17th ICLS in December 2003, ILO
stated that, subject to the availability
During these tests, the following oper-
of resources in the ILO and member
ational criteria to define informal jobs
States, further methodological studies
(especially those held by employees) on the measurement of informal em-
have been used: ployment will be undertaken in cooper-
Lack of a written employment contract ation with interested national statistical
Lack of coverage by the social securi- agencies, aimed at specifying operation-
ty system al criteria for the definition and identifi-
cation of relevant sub-categories of in-
Lack of entitlement to paid annual or
formal jobs as targets for data analysis
sick leave
and policy-making. The results of such
Lack of protection against arbitrary studies may also provide useful inputs
dismissal or the casual nature of work. to a possible revision or extension of

International Classification of Status in ‘Guidelines’, endorsing it as an interna-
Employment (ICSE-93). tional statistical standard (ILO 2003).
These ‘Guidelines’ complement the 15th
ILO Statistical Standard
ICLS Resolution concerning statistics of
The 17th ICLS examined the conceptual employment in the informal sector. The
framework proposed for measurement work by the Delhi Group and its mem-
of informal employment, made some bers was essential to the development
minor amendments to it, and adopted and adoption of the ‘Guidelines’.

Estimating Informal Employment and Poverty in India

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Discussion Paper Series - 7

Estimating Informal Employment

Council for Social Development

II METHODOLGY & DEFINITIONS 10

III ESTIMATION OF INFORMAL EMPLOYMENT 23

IV EMPLOYMENT IN INFORMAL SECTOR, POVERTY & GENDER 37

ANNEXURE: INFORMAL EMPLOYMENT: EVOLVING PERSPECTIVES 78

CES Consumer Expenditure Survey

The Background number of informal jobs in a given refer-

2 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

4 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Conceptual Framework ties went unrecorded in the public do-

6 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

informal. It will be necessary to ensure likely to work in the informal sec-

8 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Methodology & Definitions

Framework z Informal sector enterprises comprise

10 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Figure 1: Conceptual Framework – Informal employment

Production Jobs by status in employment

Methodology & Definitions 11

12 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Methodology & Definitions 13

14 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Methodology & Definitions 15

16 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Methodology & Definitions 17

Production Jobs by status in employment

18 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Methodology & Definitions 19

20 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Measuring Poverty z Persons with consumption less than

22 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Estimation of Informal Employment

Informal Employment among though, these proportions were not

24 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Estimation of Informal Employment 25

26 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Table 3.3 : Percentage distribution of agricultural workers (PS + SS) - 1999-2000

Estimation of Informal Employment 27

Population Percentage of Percentage of Percentage of Percentage of

28 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Estimation of Informal Employment 29

30 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Rural India Urban India India (Rural + Urban)

Estimation of Informal Employment 31

Population segment Percentage of construction Percentage of informal Percentage of informal

32 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Table 3.9 : Percentage distribution of trade workers (PS + SS) reporting

Estimation of Informal Employment 33

Population segment Percentage of trade Percentage of informal Percentage of informal

34 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Estimation of Informal Employment 35

36 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Employment in Informal Sector,

Exploring the Linkages mainstay of 42 percent of households,

38 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA

Employment in Informal Sector, Poverty & Gender 39

Urban Males Urban Females Urban Persons

Households with Employment Poverty Ratios

Table 4.5 : Poverty ratios among persons of households sustaining on employment

40 ESTIMATING INFORMAL EMPLOYMENT & POVERTY IN INDIA