The Economic Census 1998s All India Report 2001 helps us look at the unorganized sector in some detail. There were a total of 30.35 million enterprises, 17.71 million in rural areas and 12.64 million in urban areas, employing a total of 83.4 million workers: 80 per cent men, 17.3 per cent women and 2.7 per cent children. Among the enterprises 11.4 per cent were agriculturally active. Interestingly 88.6 per cent were involved in non-agricultural activities. In the rural areas 18.1 per cent were engaged in agricultural activities and remaining 81.9 per cent in non-agricultural activities. As expected in urban areas 97.8 per cent were in non-agricultural work and a small per cent of 2.2 were in agricultural work.
This census also found that 80.4 per cent of the 30.4 million enterprises in the country were self-financing. Banks and financial institutions directly financed only 2.8 per cent of enterprises and 1.9 per cent received any funding from poverty alleviation programs like the Integrated Rural Development Program (IRDP), Development of Women and Children in Rural Areas (DWCRA) or other State schemes. In short, only 4.7 per cent of all enterprises, rural or urban, got any kind of formal finance. In 2002 the unorganised sector employed nearly 90 million people in 35 million enterprises got, little attention, less than five per cent of the units got help from institutional financiers!
This acute shortage of credit for the unorganised sector can be linked to its status; it falls between the two priority areas - agriculture and industry. As part of the Green Revolution focus of the 1970s the banking system expanded into rural areas but (despite its limitations) catered to needs of the agricultural community, while the cities had the relative comfort of urban banks and specialised monetary institutions within reach. In mid 1990s institutions like SIDBI (Small Industries Development Bank of India) and NABARD (National Bank for Rural Development) became aware of the neglect and set up specialised windows for micro-credit, NABARD through the self-help group (SHG) and bank linkage while SIDBI through the Foundation for Micro-credit.
Keeping in line with this the World Bank Study showed that only 22 per cent of the rural households got any kind of credit from formal sources like banks, co-operatives or insurance companies; the remaining 78 per cent got credit from informal sources like money lenders, landlords, friends or relatives. There is no data on credit influenced by social factors like scheduled castes, scheduled tribes or minorities. Women as small borrowers (below Rs. two lakhs) numbered 14.5 per cent. Looking regionally, north-eastern, eastern and central regions did not get adequate credit. Another noticeable factor is size wise distribution of credit.
The RBI data, (Banking Statistics, March 1999) clearly shows that credit given to loan accounts below Rs. 25,000 has decreased from 19 per cent in 1992 when fiscal reforms began to 7.9 per cent in 2001. It is clear that banks are reducing their contact with small borrowers. In fact the number of small borrower accounts have come down from nearly 5.6 crores in 1992 to 3.9 crores accounts in 2001.
We need to implement solutions, and all is not bleak. The new generation micro-finance institutions (MFIs) have under taken various commendable efforts. NGOs promoting SHGs at village level linking the local SHGs with banks, as done by Professional Assistance for Development Action (PRADAN) in Bihar, Mysore Resettlement and Development Agency (MYRADA) in Karnataka, and more. There are also NGOs-MFIs directly lending to people as Society for Helping Awakening Rural Poor (SHARE) in Andhra Pradesh and Rural Development Organization (RDO) in Manipur. There are also MFIs specifically organised as co-operatives such as Mutually Aided Cooperative Thrift Societies (MACTs) in Andhra Pradesh or Self Employed Women's Association (SEWA) bank in Gujarat. Or look towards MFIs organised as non-banking finance companies (NBFCs) like BASIX in Andhra Pradesh or CASHPOR Financial and Technical Services (CFTS) in Uttar Pradesh.
Wanted jobs, jobs and more jobs
One statistic intimately connected with joblessness is population. India added about 181 million persons between 1991-2001, which is more than the estimated population of Brazil, the fifth most populous country in the world. Uttar Pradesh continues to be the most populous state at 16.17 per cent followed by Maharashtra (9.42 per cent) and Bihar (8.07 per cent). In fact the population of Uttar Pradesh (166 million) is more than the estimated population of Pakistan.
For the past five summers, Binjaram has joined hundreds of men from villages in western Rajasthans Barmer district in an annual migration to the salt fields of Gujarat, 500 kms away. The reason behind this migration is a pressing one - survival. Some from his village have gone to Punjab to work as daily-wage laborers in the agricultural sector. Things have become difficult for them over the past year. Many from Bihar work at low wages. Bhagataram Choudhary a taxi-driver says, We cant compete with them, and this has created more unemployment and hardship.
The rate of job seekers is rising. According to the projections in the Ninth Plan, the labor force was to increase by 52.4 million in the plan period (1997-2002) and was to outpace the growth rate in population by 1.58 per cent. The 15-60 age group is likely to grow faster than the population growth rate. This group will seek employment actively. In future this group is estimated to go up to 692 million by 2007 and 758 million by 2012.
The towering tide of unemployment has social, economic and political ramifications. Instigated by anti-social and anti-national elements, the resentment of millions of youngsters without gainful employment and practically nothing to fall back could create an explosive and uncontrollable situation. Former Lok Sabha speaker P.A. Sangma had announced in a meeting at Assam, Large-scale unemployment in this under developed region has bred insurgency. Another member pointed out that problem of insurgency was non-existent in any of the developed countries because of the simple reason that unemployment problem was not rampant.
The 2001 study of Narcotics Control Bureau (NCB) clearly linked drug abuse to unemployment. Those involved in the drug trade had little alternative means to improve their lives. The best deterrent of drug abuse and trafficking is economic development of all classes and categories.
The numbers are telling.