Employment and Livelihood Potential of Rural Non-farm Informal Enterprises

  • Nripendra Kishore MishraEmail author
Part of the India Studies in Business and Economics book series (ISBE)


There are two quite opposite views about rural non-farm informal enterprises (RNFIEs). First, it is low productivity sector producing low-quality goods, and the second one recognizes it as dynamic, flexible, innovative and contributing significantly in economic development. Based on National Sample Survey unit-level data (1999–2000 and 2010–11) and village-level household enterprise data, this chapter examines the employment and livelihood potential of RNFIEs in Uttar Pradesh. Though a higher percentage of informal enterprises have reported expansion, still more than half of enterprises are stagnant. These enterprises are essentially owned by illiterate, landless and middle castes having nothing else to do. Almost three-fourths of OAEs and more than half of establishments have GVA per worker below notional income which is a matter of major policy concern. Nevertheless, this study confirms that enterprise profit contributes significantly in household income and in the absence of this, household takes recourse to wage income, suggesting that RNFIEs are replacing casual work in households with enterprises. This study also questions aggregative method of studying RNFIEs.


Employment and livelihoods Rural non-farm informal enterprises Gross value added 


  1. Bairagya, I. (2012). Employment in India’s informal sector: Size, pattern, growth and determinants. Journal of the Asia Pacific Economy, 17(4), 593–615.CrossRefGoogle Scholar
  2. Chen, M., Vanek, J., & Heintz, J. (2006). Informality, gender and poverty, a global picture. Economic and Political Weekly, 41(21), 2131–2139.Google Scholar
  3. Deshpande, A., & Sharma, S. (2013). Entrepreneurship or survival? Caste and gender of small business in India. Economic & Political Weekly, 28(28), 38–49.Google Scholar
  4. Dreze, J., & Sharma, N. (1998). Palanpur: Population, society economy. In P. Lanjouw & N. Stern (Eds.), Economic development in Palanpur over five decades. Oxford: Clarendon Press.Google Scholar
  5. GoUP. (2009–2010a). Monitoring Poverty in Uttar Pradesh, A Report on the Fourth Poverty and Social Monitoring Survey (PSMS—IV), Government of Uttar Pradesh.Google Scholar
  6. GoUP. (2009–2010b). Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).Google Scholar
  7. GoUP. (2011–2012). Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).Google Scholar
  8. GoUP. (2012–2013). Economic Survey, Directorate of Economics and Statistics, Government of Uttar Pradesh (GoUP).Google Scholar
  9. Jolliffe, D. (2004). The impact of education in rural ghana: Examining household labor allocation and returns on and off the farm. Journal of Development Economics, 73(1), 287–314.CrossRefGoogle Scholar
  10. Kabeer, N. (2012). Women’s economic empowerment and inclusive growth: Labour markets and enterprise development. SIG Working Paper 2012/1.Google Scholar
  11. Lerche, J. (1995). Is bonded labour a bound category? Reconceptualising agrarian conflict in India. Journal of Peasant Studies, 22(3), 484–515.CrossRefGoogle Scholar
  12. Lerche, J. (1999). Politics of the poor: agricultural labourers and political transformation in Uttar Pradesh. Journal of Peasant Studies, 26(2–3), 182–241.CrossRefGoogle Scholar
  13. Maithi, D., & Mitra, A. (2011). Informality, vulnerability and development. Journal of Developmental Entrepreneurship, 16(2), 199–211.CrossRefGoogle Scholar
  14. Mishra, N. K., Raman, R., & Singh, U. B. (2013). Unpublished report on Dynamics of Growth of Rural Non-Farm Sector in Uttar Pradesh, Funded by University Grant Commission, submitted by Department of Economics, Banaras Hindu University, Varanasi.Google Scholar
  15. Mishra, N. K., & Singh, U. B. (2015). Rural non-agricultural enterprises in Uttar Pradesh: Continuity and change. In S. Singh & D. Raina (Eds.), Society and development: Regional perspective. Jaipur: Rawat Publications.Google Scholar
  16. Mitra, A. (2013). Can industry be the key to pro-poor growth? An exploratory analysis for India. ILO Asia Pacific Working Paper Series.Google Scholar
  17. Mitra, A., & Pandey, A. (2013). Unorganized sector in India: Employment elasticity and wage-productivity nexus. Journal of Development Entrepreneurship, 18(4), 1350028 (1–19).Google Scholar
  18. NCEUS. (2007). Conditions of work and promotion of livelihoods in the unorganised sector. National Commission for Enterprises in the Unorganized Sector (NCEUS), New Delhi: Government of India.Google Scholar
  19. Papola, T. S. (1981). Urban informal sector in a developing economy. New Delhi: Vikas Publishing House.Google Scholar
  20. Ranjan, S. (2009). Growth of rural nonfarm employment in Uttar Pradesh: Reflection from recent data. Economic and Political Weekly, 44(4), 63–70.Google Scholar
  21. Schultz, T. P. (1988). Education investments and returns. In Handbook of development economics (Vol. 1). Elsevier.Google Scholar
  22. Sharma, R., & Poleman, T. T. (1994). The new economics of India’s green revolution: Income and employment diffusion in Uttar Pradesh. Delhi: Vikas Publishing House.Google Scholar
  23. Singh, A. K. (2005). Role of rural non-farm sector in rural transformation: Evidences from Uttar Pradesh. In R. Nayyar & A. N. Sharma (Eds.), Rural transformation in India: The role of non-farm sector. Institute for Human Development.Google Scholar
  24. Singh, A. K. (2012). Income and consumption level of farmers in Uttar Pradesh. Unpublished Project Report funded by Dept. of Planning Government of Uttar Pradesh submitted by Giri Institute of Development Studies, Luknow.Google Scholar
  25. Srivastava, R. S. (1996). Agrarian change and the labour process. In P. Robb (Eds.), Meanings of agriculture: Essays in South Asian history and economics. Oxford University Press.Google Scholar
  26. Srivastava, R. S. (1999). Rural labour in Uttar Pradesh: Emerging features of subsistence, contradiction and resistance. Journal of Peasant Studies, 26(2–3), 263–315.CrossRefGoogle Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Department of EconomicsBanaras Hindu UniversityVaranasiIndia

Personalised recommendations