Nsso Informal Sectors and Conditions of Employment in India 2004 05

8/3/2019 Nsso Informal Sectors and Conditions of Employment in India 2004 05

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Report No. 519 (61/10/7)

Informal Sector and Conditions of

Employment in India

2004-05

(Part I)

NSS 61st ROUND

(July 2004 June 2005)


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PREFACE

The National Sample survey Organisation (NSSO) conducts socio-economic surveys

covering various subjects on regular basis. Subjects are selected keeping in view the

importance of the subject. As part of the NSS 61st round during the period July 2004 June

2005, the Employment and Unemployment survey was conducted on large sample basis and

this was the seventh quinquennial survey. Keeping in view the significant proportion of

workers in India engaged in the informal sector of the economy, a set of probing questions

were asked to usual status workers to collect the information on the characteristics of the

workers and the enterprises in which they worked.

This report, last in the series of seven reports on employment and unemployment

based on NSS 61st round data, provides information on various aspects of the workers

engaged in non-agricultural sectors as well as agricultural sector except those engaged in only

growing of crops, market gardening, horticulture and growing of crops combined with

farming of animals which includes their detailed activity status, location of work place, type

of enterprises where they worked, use of electricity for production, number of workers and

existence of trade union/association in the enterprise where they worked, etc. This report

contains three Chapters, including the introductory Chapter and three appendices. Chapter

Two states in detail the concepts and definitions of only those terms used in the survey in

connection with the various items covered in this report. Chapter Three discusses the main

findings of the survey. While Appendix A gives the detailed tables on which this report is

based, Appendix B presents a detailed description of the sample design and estimation

procedure used for the survey and Appendix C gives a facsimile of the Schedule canvassed in

the survey.

The Survey Design and Research Division (SDRD) of the NSSO undertook the

development of the survey methodology as well as drafting of the report. The field-work was

carried out by the Field Operation Division (FOD) of NSSO while the data processing and

tabulation work was handled by Data Processing Division (DPD) of NSSO. The Co-

ordination and Publication division (CPD) of NSSO coordinated various activities pertaining

to the survey.

I am thankful to the Chairman and the Members of the then Governing Council of

NSSO and Working Group for the NSS 61st round for their valuable guidance at various

stages of survey activities from designing of the questionnaire to the preparation of this

report. I also place on record my thanks to various officers of different divisions involved in

the preparation of this report


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Highlights

HIGHLIGHTS

This report is based on the seventh quinquennial survey on employment and unemploymentconducted in the 61

stround of NSS during July, 2004 to June, 2005. The survey was spread

over 7,999 villages and 4,602 urban blocks covering 1,24,680 households (79,306 in the rural

areas and 45,374 in the urban) and enumerating 6,02,833 persons (3,98,025 in the rural areasand 2,04,808 in the urban). In the NSS 61

stround, particulars of the workers in the informal

sector and conditions of employment of the different categories of employees (viz., regular

wage/ salaried workers and casual labours) were collected for the industry groups/ divisions012, 014, 015, 02,05, 10-99 (Descriptions of these industry groups/ divisions are given in

Annexure I of Chapter Two). Among these, the industry groups 012, 014, 015, 02, 05 were inthe [ag]ricultural sector [e]xcluding only [ g]rowing of [c]rops, market gardening,

horticulture (industry group 011) and growing of crops combined with farming of animals

(industry group 013) (henceforth referred to as AGEGC sector). The industry divisions 011

and 013 were kept out of the coverage. In India, nearly 52 per cent of the workers wereemployed in the industry groups 011 and 013; a whopping 65 per cent in the rural areas and a

meager 7 per cent in the urban areas. The entire non-agriculture sector(industry divisions 10-

99) was covered in the survey. Thus, the coverage of this report has been mostly confined to

AGEGC and the non-agricultural sectors for purpose of discussion on informal sector andconditions of employment of the employees. However, the discussion on the existence of

union/ association pertains to not only employees but also associations of the self-employed

workers in all the industry divisions of NIC-98, i.e., NIC 98 codes 01 to 99. Some of the keyfindings relating to proportion of workers in informal sector(defined to cover proprietary and

partnership enterprises), location of workplace of the workers, wage and salary earnings, and

some of conditions of employment, viz., eligibility of paid leave, social security benefits, typeof job contract, etc, are summarized below:

Workers in Informal sector

Among the workers under the coverage of this report, the AGEGC sector accounted for

nearly 13 per cent of the workers and the non-agriculture sector for the remaining 87 per

cent of the workers. The distribution of the total workers was further tilted in favour of thenon-agriculture sector in the urban area, where nearly 98 per cent of the workers were

engaged in non-agriculture compared to 79 per cent in rural areas.

Of the total workers, nearly 82 per cent in the rural areas and 72 per cent in the urbanareas were engaged in the informal sector(proprietary and partnership) enterprises.

Among self-employed non-agricultural workers, about 95 per cent in the rural areas and

97 per cent in the urban areas worked in the informal sector.

Among the non-agricultural workers who were casual labourers engaged in works other


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Highlights

The proportion of workers employed in the informal sectorwas quite significant amongmanufacturing sectorworkers also 88 per cent in the rural areas and 81 per cent in the

urban areas. A higher proportion of female workers in industry tabulation category manufacturing

were employed in informal sectorthan males. It is found that as high as 92 per cent and 90

per cent of female manufacturing workers were in the informal sector in the rural and

urban areas, respectively. The corresponding estimates for males were 86 per cent and 78per cent in rural and urban areas, respectively.

Among workers belonging to the real estate, renting and business, nearly 87 per cent of

the rural male workers and 78 per cent of the urban male workers were in the informalsectorwhile the corresponding proportions for female workers were 79 per cent and 64

per cent in the rural and urban areas, respectively.

In the rural areas among the non-agricultural workers, about 30 per cent workers were

engaged in manufacturing and 33 per cent of the informal sector (P&P) workers were

employed in manufacturingactivities.

In the rural areas, nearly 50 per cent of the non-agricultural female workers were engaged

in manufacturing activities and if informal sector is considered, the share ofmanufacturing activities shoots up to 60 per cent. For male workers, these proportions

were lower 24 per cent for those engaged in all non-agricultural work and 26 per cent

for those in informal sector.

In the urban areas also manufacturingand wholesale and retail trade, etc, were the main providers of non-agricultural sector employment. Among the workers of the non-

agricultural sector, nearly 27 per cent workers were engaged in manufacturingand 23 per

cent were engaged in wholesale and retail trade etc. The proportion of rural female workers having workplace in the rural areas was 91 per

cent whereas the corresponding proportion for their male counterparts was nearly 75 per

cent. The proportion of male workers residing in urban areas who had their workplace

situated in urban areas was nearly 90 per cent and in the case of females it was nearly 93per cent.

In the rural areas, among the female workers employed in the informal sector, nearly 93

per cent had their workplace in rural areas and the corresponding proportion for males was78 per cent. In the urban areas, nearly 90 per cent males and 94 per cent female workers

had their workplace in urban areas.

Female workers engaged in informal sector were found to be working more in their owndwelling compared to male workers. In the rural areas, nearly 66 per cent of the female

informal sector workers were found to be working in own dwellingand in case of males


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Highlights

In the urban areas, a little more than half (51 per cent) of all the workers engaged inmanufacturingwere employed in enterprises using electricity and in case of the informal

sector this share was nearly 44 per cent. Average wage and salary earnings per day of regular wage/salaried employees engaged in

the informal(proprietary and partnership) enterprises earned a little higher than half of the

salary earnings of the regular wage/salaried employees considering all types of

enterprises it was Rs. 173 for all types of enterprises and Rs. 93 for the informal sectorenterprises.

In the case of casual labourers, no perceptible difference was observed in the wage

earnings of the workers employed in the informalsectorenterprises compared to those ofworkers employed in all types of enterprises Rs. 67 in both cases.

Conditions of Employment

In both the rural and urban areas, nearly 59 per cent of the regular wage/salaried

employees had no written job contract.

About 33 per cent of the regular wage /salaried employees were temporary employees.

Nearly 46 per cent of regular wage/ salaried employees were not eligible for paid leave

and in the case of casual labourers, nearly 96 per cent were not eligible for paid leave.

Nearly 55 per cent of regular wage/salaried employees and 96 per cent of casual labourers

were not eligible for social security benefit.

About 63 per cent of the employees had neither a written job contract nor were eligible for

the paid leave. The proportions were 71 per cent and 55 per cent for the rural and urban

areas, respectively.

For 88 per cent of regular wage /salaried employees, regular monthly salary formed the

basis of payment. In the case of casual labourers, only 8 per cent got regular monthly

salary andfor them daily paymentwas the most prevalent method of payment - nearly 51

per cent.

Existence of Union/ Association

Nearly 79 per cent of the casual labourers of age 15 years and above, in both rural andurban areas, had no union/ association in their activity.

Among the self-employed persons of age 15 years and above, nearly 73 per cent had no

union/ association in their activity. The percentages for the rural and urban sector being 80

per cent and 63 per cent respectively.


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Contents

Contents

PART - IPage

Chapter One Introduction 1 6

Chapter Two

Concepts and Definitions7 31

Chapter Three Summary of Findings 32 - 138

Appendix A Detailed Tables (Table 1 to Table 4) A-1 A-279

PART - IIAppendix A Detailed Tables (Table 5 to Table 12) A-280 A-681

Appendix B Sample Design and Estimation Procedure B-1 B-9

Appendix C Schedule on Employment and Unemployment (Sch. 10) C-1 C-16

Appendix A

Table No. Title Page

Table (1) Per 1000 distribution of usually working persons engaged in theindustry groups/ divisions 012, 014, 015, 02, 05 or 10-99 by type of

enterprise for each activity status

A-1 A-54

Table (2) Per 1000 distribution of usually working persons engaged in the

industry groups/ divisions 012, 014, 015, 02, 05 or 10-99 by

enterprise type for each industry group/ tabulation category

A-55 A-135


industry groups/ divisions 012, 014, 015, 02, 05 or 10-99 by locationof workplace for each enterprise type

A-136 A-243

Table (4) Per 1000 distribution of usually employed persons engaged in the A-244 A-279


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Contents

Table No. Title Page

Table (6) Per 1000 distribution of regular salaried/ wage employees and casual

labours by eligibility of paid leave for each industry group/tabulation category

A-334 A-387


labours by availability of social security benefit for each industrygroup/ tabulation category

A-388 A-441


labours by method of payment for each industry group/ tabulationcategory

A-442 A-495


labours and working in the industry groups/ divisions 012, 014, 015,02, 05 or 10-99 by availability of social security benefit separately

for type of job contract, eligibility for paid leave and method of

payment

A-496 A-603

Table (10) Per 1000 distribution of usually working (ps+ss) persons (age 15

years & above) by existence of trade union/associations in their

activity and its membership for each broad usual activity status

A-604 A-609


industry groups/ divisions 012, 014, 015,02, 05 or 10-99 by type of

job contract and nature of employment for different broad industrygroups

A-610 A-627

Table (12) Average wage/salary earnings (Rs. 0.00) per day received by wage

/salaried employees according to the usual status for differentindustry group/ tabulation category and enterprise type in which

they were usually engaged

A-628 A-681


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Chapter One

Introduction

Chapter One

Introduction

1.1 The Report in Perspective

1.1.1 An all-India survey of the situation of employment and unemployment in India was

carried out as a part of the 61st round of the National Sample Survey Organisation (NSSO)

during the period July 2004 - June 2005. This nation-wide enquiry was conducted to

provide estimates on various characteristics pertaining to employment and unemployment

in India at the national and state levels. Information on various facets of employment and

unemployment was collected through a schedule of enquiry (Schedule 10). Based on the

data collected during the entire period, estimates pertaining to employment-unemployment

in India along with various characteristics associated with them have been presented in

NSS Report No. 5151.

1.1.2 In the NSS 61st round, a set of probing questions were asked to usual status workers

regarding some features of the enterprises in which they worked, in order to study the

characteristics of the workers particularly in the unincorporated enterprises2

that were

largely considered as constituting informal sector. This report, the last in the series of sevenreports, based on Schedule 10 (Employment and Unemployment) pertains to the estimates

of workforce according to characteristics of enterprise where individuals work, with special

reference to those engaged in the informal sectorenterprises. The estimates have, as usual,been presented in respect of various characteristics associated with them.

1.1.3 The NSSO during the 55th

round survey (July 1999- June 2000), for the first time,

collected more or less similar types of information, through employment unemployment

survey, in respect of workers engaged in the non-agricultural enterprises in the informalsector and the estimates on them are available in NSS Report No. 4603. Moreover, in the

55th

round, the information on non-agricultural enterprises in the informal sectorwas alsocollected directly from the enterprises by canvassing a separate schedule of enquiry

(Schedule 2.0). This schedule was canvassed for the informal sector enterprises, which

covered all unincorporated enterprises in the non-agricultural sector which operated on

either proprietary or partnership basis. However, there were significant differences

regarding the methods of data collection, the approach followed and the concepts used in

these two above mentioned surveys. All the data in Schedule 10 were collected throughhousehold surveys and the informants were generally members of households to whichworkers belonged. On the other hand, in Schedule 2.0, the respondents were generally

owners/ managers of enterprises from whom all information on workers was obtained.Further, in Schedule 10, information on workers and on various features of enterprises

having a bearing on their work like location of work place, maintenance of written

accounts etc were collected whereas in Schedule 2 0 the emphasis was more on such


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Chapter One

Introduction

the NSS 61st

round no attempt has been made to collect data from the informal sector

enterprises through Schedule 2.0.

1.2 Background

1.2.1 One of the important quinquennial surveys conducted by the NSSO is on

employment-unemployment. The first such survey was conducted during September

1972-October 1973 corresponding to the 27th

round of NSSO. The present survey is the

seventh in the series.

1.2.2Past Surveys: To assess the volume and structure of employment and unemployment,starting with the 9th round (May-September, 1955), NSSO conducted a number of surveys

on employment and unemployment. To give a firm conceptual framework for conducting

such surveys, the Planning Commission, in the year 1970, set up an Expert Committee on

Unemployment Estimates, (popularly known as the Dantwala Committee), which

reviewed these surveys and the indicators generated from such surveys. Based on the

concepts and definitions recommended by this committee, the first quinquennial survey on

employment and unemployment was conducted in the 27th round of NSS. After the 27th

round, five comprehensive quinquennial surveys on employment and unemployment

situation in India have been carried out by the NSSO prior to the present one. These were

carried out during the 32nd round (July 1977 June 1978), 38th round (January 1983 December 1983), 43

rdround (July 1987 June 1988), 50

thround (July 1993 June 1994),

and 55th round (July 1999 June 2000), in which concepts, definitions and procedures

were based primarily on the recommendations of the Dantwala Committee. The results of

these surveys have been brought out in the form of NSS reports.

1.2.3 Other surveys on employment-unemployment: Apart from the quinquennial surveyson employment and unemployment, NSSO has been regularly collecting information on

certain key items on employment and unemployment from a limited set of households ineach round since its 45th round (July 1989 June 1990), known as annual series, through

the schedule on Household Consumer Expenditure (Schedule 1.0). In the annual series,

only some key particulars on the usual and current weekly status of the individuals were

collected, and the current weekly status of a person was determined through a direct query.

In the 60th

round (January June 2004), there was a change in the procedure of collecting

information on employment and unemployment. During the formulation of NSS 60th

round survey, the Planning Commission emphasized their need for annually collecting

data on the current daily status of employment and unemployment as well. The collectionof data in the current daily status necessitated the separation of two enquiries on

Household Consumer Expenditure and Employment-Unemployment, and as a result, a

separate schedule on employment and unemployment (Schedule 10) was canvassed in the

60th

round, in which concepts, definitions and procedures were similar to the quinquennial

rounds. The results of such surveys have been published in the form of NSS reports.


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Chapter One

Introduction

a) Certain information to identify informal employment4

has been collected from all usual

status workers with respect to their principal work activity and/or their subsidiary activity,

engaged in non-agricultural sector as well as in the agricultural sector excluding only

growing of crops, market gardening, horticulture and growing of crops combined withfarming of animals. Indeed, according to NIC-98, information on informal employment

has been collected from usual status workers engaged in industry groups 012, 014, 015

and divisions 02 to 99. The descriptions of these industry groups/ divisions of NIC-98 is

presented in Annexure I, at the end of Chapter Two (Concepts and Definitions).. In this

round, in the employment-unemployment schedule, certain probing questions were asked

to the usual status workers engaged in the industry groups/ divisions 012, 014, 015, 02, 05

and 10-99 and working in the unincorporated enterprises (i.e., the proprietary and

partnership enterprises) to identify the size of employment and along with some othercharacteristics of those enterprises, where such workers were employed. The estimates

relating to these information and related discussion are within the purview of this report.

b) In the employment and unemployment surveys, data on wages have so far been

collected for the employees according to the current daily status. In the 61st round survey,

attempt has been made to assess the quality of self-employment in terms of the earnings

through certain probing questions. From the self-employed persons according to the usual

status, information on two items viz. whether earning from self-employment wasremunerative and what amount per month was considered remunerative was collected in

terms of pre-specified codes.

c) Information on vocational training receiving/received by the persons of age 15 to 29

years has been collected. Further, among those who have received or are receiving formal

vocational training, information on the source from where degree/diploma/certificate

received/ to be received, duration of training and field of training has been collected.

d) Information on voluntary participation without remuneration in production of goodsand services has been collected for those members of the household who were not

workers, considering both principal and subsidiary status, as per existing production

boundary followed by NSSO.

e) Instead of collecting information on skill for the persons of age below 75 years, who are

not employed in the usual principal status, information has been collected on suitable type

of occupation in which person was seeking or available for work.

f) Information on period of seeking/availability for work during the last 365 days has

been collected for all the persons of age 5 years and above. In the earlier quinquennial

rounds, this information was collected only for those who were unemployed in the usual

principal status.


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Chapter One

Introduction

longer time was recorded and a person was considered to have performed subsidiary

economic activity if the activity was performed at least for 30 days in the reference year.

Further, departing from the past practice of canvassing schedule 10 and schedule 1.0(household consumer expenditure) on the same set of households till the 50th

round, these

two schedules of enquiry are being canvassed in two separate sets of households since the

55th

round.

1.3 Scope

1.3.1Items of enquiry: As in the past, in the present survey too, NSSO collected data onsome characteristics based on which estimates of employment and unemployment,

measured in terms of 3 basic approaches, viz., usual status, current weekly status andcurrent daily status can be obtained. The reference periods for these approaches differ -

these being 365 days preceding the date of survey for usual status, 7 days preceding the

date of survey for current weekly status and each day of the 7 days preceding the date of

survey for current daily status.

1.3.2 Data were collected on the activity status of all persons, i.e., for workers, for those

seeking or available for work and also, for those reporting out of labour force. A worker

could be self-employed or enjoy regular wages/salaries or be employed on casual wage

basis. Data on this aspect, along with the industry of work of the worker and his/heroccupation, were collected in this survey. In order to examine the multi-dimensional

features of the employment-unemployment situation in India, information on several of

its correlates were also gathered. In addition, probing questions were put to the workers in

order to understand the extent of underutilization of the labour time and acquire more

specific information in this regard. An effort was also made to collect information on the

qualitative aspects of employment like changes in activity status, occupation /industry,

existence of trade unions/associations, nature of employment, etc. Data were also collected

for workers engaged in non-agricultural sector as well as in the agricultural sectorexcluding only growing of crops, market gardening, horticulture and growing of crops

combined with farming of animals about their detailed activity status, location of work

place, type of enterprises where they worked, use of electricity for production, number of

workers in the enterprise where they worked, and some more details for the wage

employees relating to type of job contract, eligibility for paid leave, social security

benefits, method payment, etc.

1.3.3 The present report seventh in the series deals with the workers - engaged in non-

agricultural sector as well as in the agricultural sector excluding only growing of crops,market gardening, horticulture and growing of crops combined with farming of animals -

by various attributes such as their activity status, broad industry of work, enterprise type,

location of workplace, etc. with special emphasis on workers in the informal sector, i.e.,those generally considered working in proprietary or partnership type of enterprises. For

the purpose of understanding the informal sector and informal employment


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Chapter One

Introduction

agricultural sector (excluding growing of crops, market gardening, horticulture and

growing of crops combined with farming of animals).

1.4 The Survey Outline

1.4.1 Geographical coverage: The survey covered the whole of the Indian Union except(i)Leh and Kargil districts of Jammu & Kashmir, (ii) interior villages of Nagaland situated

beyond 5 kilometres of the bus route and (iii) villages in Andaman and Nicobar Islands

which remained inaccessible throughout the year. All the sample first stage units of the

districts of Poonch and Rajouri of Jammu & Kashmir, all rural samples of the district of

Doda of Jammu & Kashmir, and all rural samples of the district of Nicobar of Andaman

and Nicobar Islands became a causality and therefore, these areas are outside the survey

coverage.

1.4.2 Sub-round: The fieldwork of the 61st round of NSSO started on 1st July, 2004 andcontinued till 30

thJune, 2005. As usual, the survey period of this round was divided into

four sub-rounds, each of a duration of three months, the 1st

sub-round period ranging from

July to September 2004, the 2nd sub-round period from October to December 2004 and so

on. An equal number of sample villages/blocks (FSUs) were allotted for survey in each of

these four sub-rounds. The survey used the interview method of data collection.

1.5 Sample Design

1.5.1 In the 61st round survey, a stratified multi-stage sampling design was adopted for

selection of the sample units for rural and urban areas. The first stage units (FSUs) were

the census villages (panchayat wards for Kerala) for rural areas and the NSSO Urban

Frame Survey (UFS) blocks for urban areas. The ultimate stage units (USUs) were the

households for both rural and urban areas. Hamlet-groups/sub-blocks constituted the

intermediate stage whenever these were formed in the sample FSUs. For rural areas, thelist of 2001 census villages constituted the sampling frame for selection of sample FSUs

for most of the states. For the rural areas of Kerala, however, the list of panchayat wards

was used as the sampling frame for selection of panchayat wards. For the urban areas, the

latest lists of UFS blocks constituted the sampling frame for selection of sample FSUs.

Within each district of a State/UT, two separate basic strata were formed for rural areas

and urban areas. All rural areas of the district comprised rural stratum and all the urban

areas of the district comprised urban stratum.

1.5.2 At the all-India level, a total number of 12788 FSUs (8128 villages and 4660 urban

blocks) was allocated for the survey and this was allocated to the different States and UTs

in proportion to population as per census 2001 which was then allocated between rural and

urban sectors in proportion to population as per population census 2001 with 1.5weightage to urban sector. Within each of the rural and urban sector of a State/UT, the

respective sample size was allocated to the different strata in proportion to the stratum


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Chapter One

Introduction

of u/2 sub-strata were formed within that urban stratum. From each sub-stratum of the

urban stratum of a district, two FSUs were selected with simple random sampling without

replacement (SRSWOR). Within each sub-stratum, samples were drawn in the form of

two independent sub-samples in both the rural and urban sectors. All households listed inthe selected village/block/ hamlet-groups/sub-blocks were stratified into three second

stage strata (SSS). A total of 10 households were selected from each sample village/block

for canvassing the employment and un-employment schedule. The sample households

from each of the second stage strata were selected by SRSWOR.

1.5.4 Out of the total number of 12788 FSUs (8128 villages and 4660 urban blocks)

selected for survey for the central sample, 12601 FSUs (7999 villages and 4602 urban

blocks) could be surveyed at the all-India level for canvassing Schedule 10. The numberof households surveyed was 1,24,680 (79,306 in rural areas and 45,374 in urban areas) and

number of persons surveyed was 6,02,833 (3,98,025 in rural areas and 2,04,808 in urban

areas). The sample design and estimation procedure used for the survey is given in

Appendix B of the report.

1.6 Contents of the Report

1.6.1 As stated earlier, this report deals with various estimates with regard to workers

engaged in non-agricultural sector as well as in the agricultural sector (excluding growingof crops, market gardening, horticulture and growing of crops combined with farming of

animals) along with their correlates as obtained on the basis of data collected on relevant

items of information for the entire round. Consequently, all discussions in this report are

limited to only such items/concepts, based on which estimates have been generated.

Detailed explanations of these are given in the next chapter entitled Concepts and

Definitions.

1.6.2 This report contains three chapters, including the present introductory chapter, and

three appendices. Chapter Two indicates in detail the concepts and definitions of onlythose terms used in the survey in connection with the various items covered in this report.

Chapters Three discusses the main findings of the survey relating to these items. While

Appendix A gives the detailed tables on which this report is based, Appendix B presents a

fairly detailed description of the sample design and estimation procedure used for the

survey and Appendix C gives a facsimile of the Schedule canvassed in the survey.

1.6.3 The detailed tables turned out to be very voluminous. Hence, this report is being

brought out in two volumes.

1.6.4 Tables in Appendix: Appendix of the report contains twelve tables. Of these, fiveprovide estimates of workers including both the self-employed and wage employees by

various attributes such as their activity status, enterprise type, location of workplace, using

electricity for production, existence of union/ association in the activity, etc. The other

seven tables present estimates of wage employees by some combination of attributes like


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Chapter Two

Concepts and Definitions

Chapter Two


2.0 The concepts and definitions of some important terms used in the survey and relevant to

this report are explained in the following paragraphs.

2.1 Household: A group of persons who normally lived together and took food from a

common kitchen constituted a household. The adverb normally means that temporary

visitors and guests (whose total period of stay in the household was expected to be less than 6months) were excluded but temporary stay-aways (whose total period of absence from the

household was expected to be less than 6 months) were included. Thus a child residing in a

hostel for studies was excluded from the household of his/her parents, but a resident domestic

servant or paying guest (but not just a tenant in the house) was included in theemployers/hosts household. Living together was given more importance than sharing

food from a common kitchen in drawing the boundaries of a household in case the two

criteria were in conflict. However, in the special case of a person taking food with his family but sleeping elsewhere (say, in a shop or a different house) due to shortage of space, the

household formed by such a persons family members was taken to include the person also.

Each inmate of a hotel, mess, boarding-lodging house, hostel, etc., was considered to be asingle-member household except that a family living in a hotel (say) was considered one

household only. The same principle was applicable for the residential staff of such

establishments.The size of a household is the total number of persons in the household.

2.2 Economic activity: The entire spectrum of human activity falls into two categories

economic activities and non-economic activities. Any activity resulting in production of

goods and services that add value to national product was considered as an economic activityfor the employment and unemployment survey of NSS 61

stround. Such activities included

production of all goods and services for market (i.e. for pay or profit) including those of

government services, and, the production of primary commodities for own consumption andown account production of fixed assets.

2.2.1 The full spectrum of economic activities as defined in the UN system of NationalAccounts (1993) was not covered in the definition adopted for the NSS 61st

round survey of

Employment and Unemployment. Production of any good for own consumption is considered

as economic activity by UN System of National Accounts but production of only primarygoods for own consumption was considered as economic activity by NSSO. While the former

considers activities like own account processing of primary products as economic activities, in


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(i) all the market activities performed for pay or profit which result in production of goods

and services for exchange.

(ii) of the non-market activities,

(a) all the activities relating to the primary sector (i.e. industry Divisions 01 to 14 of

NIC-98) which result in production (including free collection of uncultivated crops,

forestry, firewood, hunting, fishing, mining, quarrying, etc.) of primary goods for ownconsumption

and

(b) the activities relating to the own-account production of fixed assets, which includeproduction of fixed assets includes construction of own houses, roads, wells, etc., andof machinery, tools, etc., for household enterprise and also construction of any private

or community facilities free of charge. A person may be engaged in own account

construction in the capacity of either a labourer or a supervisor.

As per the practice followed in earlier rounds, certain activities like prostitution, begging, etc.,

which though fetched earnings, were not considered as economic activities. Activity status of

a person was judged irrespective of the situation whether such activity was carried outillegally in the form of smuggling or not.

2.3Activity status: It is the activity situation in which a person was found during the reference period with regard to the person's participation in economic and non-economic activities.

According to this, a person could be in one or a combination of the following three broad

activity statuses during a reference period:

(i) working or being engaged in economic activity (work) as defined above,

(ii) being not engaged in economic activity (work) but either making tangible efforts to

seek 'work' or being available for 'work' if the 'work' is available and

(iii) being not engaged in any economic activity (work) and also not available for 'work'.

Broad activity statuses mentioned in (i) and (ii) above are associated with 'being in labourforce' and the last with 'not being in the labour force'. Within the labour force, broad activity

status (i) and (ii) were associated with 'employment' and unemployment, respectively.

2.3.1 Identification of each individual in terms of a unique activity status could pose a

problem when more than one of the three broad activity statuses listed above were


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than one economic activity during the reference period, the appropriate detailed activity status

code related to that activity in which relatively more time had been spent. A similar procedure

was adopted for assigning detailed activity code for persons categorised as engaged in non-economic activity and pursuing more than one non-economic activity.

2.3.2 The detailed activity statuses under each of the three broad activity statuses (viz.

employed, unemployed and not in labour force) and the corresponding codes used in the

survey are given below:

code description

working (or employed)

self-employed

11 worked (self-employed) in household enterprises as own-account worker

12 worked (self-employed) in household enterprises as an employer

21 worked (self-employed) in household enterprises as helper

regular wage/ salaried employee

31 worked as regular salaried/wage employee

casual labour

41 worked as casual wage labour in public works

51 worked as casual wage labour in other types of works

61 did not work owing to sickness though there was work in household enterprise

62 did not work owing to other reasons though there was work in household enterprise71 did not work owing to sickness but had regular salaried/wage employment

72 did not work owing to other reasons but had regular salaried/wage employment

not working but seeking/available for work (or unemployed)

81 sought work or did not seek but was available for work (for usual status approach)81 sought work (for current weekly status approach)

82 did not seek but was available for work (for current weekly status approach)

neither working nor available for work (or not in labour force)

91 attended educational institutions

92 attended to domestic duties only93 attended to domestic duties and was also engaged in free collection of goods

(vegetables roots firewood cattle feed etc ) sewing tailoring weaving etc for


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It may be noted that codes 61, 62, 71, 72, 82 and 98 were applicable for current weekly status

and current daily status approaches only.

2.4 Workers (or employed): Persons who were engaged in any economic activity or who,

despite their attachment to economic activity, abstained from work for reason of illness, injuryor other physical disability, bad weather, festivals, social or religious functions or other

contingencies necessitating temporary absence from work, constituted workers. Unpaid

helpers who assisted in the operation of an economic activity in the household farm or non-farm activities were also considered as workers. Relevant activity status codes within 11 to 72

were assigned for workers. Workers were further categorized as self-employed (relevant

activity status codes: 11, 12, 21, 61, 62), regular salaried/wage employee (relevantactivitystatus codes: 31, 71, 72), and casual wage labour (relevantactivity status codes: 41 and 51).

2.5 Seeking or available for work (or unemployed): Persons who, owing to lack of work,

had not worked but either sought work through employment exchanges, intermediaries,friends or relatives or by making applications to prospective employers or expressed their

willingness or availability for work under the prevailing conditions of work and remuneration,

were considered as those seeking or available for work (or unemployed). Activity status

codes 81 or 82 were assigned for unemployed.

2.6 Labour force: Persons who were either 'working' (or employed) or 'seeking or availablefor work' (or unemployed) constituted the labour force. Persons with activity status codes 11

82 constituted the labour force.

2.7 Not in labour force: Persons who were neither 'working' nor 'seeking or available forwork' for various reasons during the reference period were considered as 'not in labour force'.

Persons under this category are students, those engaged in domestic duties, rentiers, pensioners, recipients of remittances, those living on alms, infirm or disabled persons, tooyoung persons, prostitutes, etc. and casual labourers not working due to sickness. Activity

status codes 91-95, 97 and 98 were assigned for persons belonging to category 'not in labour

force'.

2.8 Self-employed: Persons who operated their own farm or non-farm enterprises or were

engaged independently in a profession or trade on own-account or with one or a few partnerswere deemed to be self-employed in household enterprises. The essential feature of the self-

employed is that they have autonomy (decide how, where and when to produce) and economic

independence (in respect of choice of market, scale of operation and finance) for carrying out

their operation. The remuneration of the self-employed consists of a non-separablecombination of two parts: a reward for their labour and profit of their enterprise. The

combined remuneration is wholly determined by the revenue from sales after netting out value


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and large, ran their enterprise without hiring any labour. They could, however, have had

unpaid helpers to assist them in the activity of the enterprise;

(ii) employers: those self-employed persons who worked on their own account or with

one or a few partners and, who, by and large, ran their enterprise by hiring labour; and

(iii) helpers in household enterprise: those self-employed persons (mostly family

members) who were engaged in their household enterprises, working full or part timeand did not receive any regular salary or wages in return for the work performed. They

did not run the household enterprise on their own but assisted the related person living

in the same household in running the household enterprise.

2.9 Regular wage/salaried employee: These were persons who worked in others farm or

non-farm enterprises (both household and non-household) and, in return, received salary or

wages on a regular basis (i.e. not on the basis of daily or periodic renewal of work contract).This category included not only persons getting time wage but also persons receiving piece

wage or salary and paid apprentices, both full time and part-time.

2.10 Casual wage labourer: A person who was casually engaged in others farm or non-farmenterprises (both household and non-household) and, in return, received wages according to

the terms of the daily or periodic work contract, was a casual wage labour.

2.11 Different approaches followed to determine activity status: The persons surveyed were

classified into various activity categories on the basis of the activities pursued by them during

certain specified reference periods. There were three reference periods for this survey. Theseare: (i) one year (ii) one week and (iii) each day of the reference week. Based on these three

periods, three different measures of activity status are arrived at. These are termedrespectively as usual status, current weekly status and current daily status. However, in this

report, the first measure has been used to determine the number of workers and current dailystatus approach has been used to determine the wage and salary earnings per day received by

wage /salaried employees according to usual status for different industry group/ tabulation

category and enterprise type in which they were usually engaged. As such the proceduresadopted to arrive at the usual status and current daily status are elucidated below.

2.11.1 Usual principal activity status: The usual activity status relates to the activity status

of a person during the reference period of 365 days preceding the date of survey. The activitystatus on which a person spent relatively longer time (i.e. major time criterion) during the 365

days preceding the date of survey is considered as the usual principal activity status of the

person To decide the usual principal activity of a person first a two stage dichotomous


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'working' (employed) or not working but seeking and/or available for work (unemployed)

was ascertained based on the same criterion viz. relatively longer time spent in accordance

with either of the two broad statuses within the labour force during the 365 days precedingthe date of survey. Within the broad activity status so determined, the detailed activity status

of a person pursuing more than one such activity was determined once again on the basis ofthe relatively longer time spent on such activities. In terms of activity status codes, codes 11-

51 were assigned to persons classified as workers and codes 91-97 to those not in the labour

force. In the usual status approach, a single code 81 was assigned to persons seeking oravailable for work (unemployed persons) while two separate codes 81 (sought work) and 82

(did not seek but was available for work) were assigned to unemployed persons according to

current weekly status and current daily status approach.

2.11.2 Usual subsidiary economic activity status: A person whose usual principal status was

determined on the basis of the major time criterion could have pursued some economic

activity for a shorter time throughout the reference year of 365 days preceding the date ofsurvey or for a minor period, which is not less than 30 days, during the reference year. The

status in which such economic activity was pursued was the subsidiary economic activity

status of that person. Activity status codes 11-51 only were used for the subsidiary economic

activity performed by a person. It may be noted that engagement in work in subsidiarycapacity may arise out of the two following situations:

(i) a person may be engaged in a relatively longer period during the 365 days in economic(non-economic activity) and for a relatively minor period, which is not less than 30

days (not necessarily for a continuous period), in another economic activity (any

economic activity). The economic activity, which was pursued for a relatively minorperiod but not simultaneously with principal activity, was considered as his/her

subsidiary economic activity.

(ii) a person may be pursuing an economic activity (non-economic activity) almostthroughout the year in the principal status and also simultaneously pursuing another

economic activity (any economic activity) for a relatively shorter time in a subsidiary

capacity. The economic activity, which was pursued for a relatively shorter time, wasconsidered as his/her subsidiary economic activity.

2.11.3 Usual activity status considering principal and subsidiary status taken together: Theusual status, determined on the basis of the usual principal activity and usual subsidiaryeconomic activity of a person taken together, is considered as the usual activity status of the

person and is written as usual status (ps+ss). According to the usual status (ps+ss), workers

are those who perform some work activity either in the principal status or in the subsidiaryTh h i k i h l i i l i id d k


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activity status for a person was determined on the basis of his/her activity status on each day

of the reference weekusing a priority-cum-major time criterion (using day to day labour time

disposition information). Time disposition was recorded for every member of the samplehouseholds. This involved recording of different activities pursued by the members along

with the time intensity in quantitative terms for each day of the reference week. The differentactivities were identified and recorded in terms of 'activity status' and 'industry' codes for

persons in urban areas and 'activity status', 'industry' and 'operation' codes for persons in rural

areas. The description (and codes used) of current daily activity statuses is the same as thoseof current weekly activity status. The terms industry and operation are explained later.

The following points were considered for assigning the time intensity and determining the

current daily status of a person:

i) Each day of the reference week was looked upon as comprising either two half days or

a full day for assigning the activity status. For recording time disposition for activities

pursued by a person in a day, an intensity of 1.0 was given against an activity that wasdone for full day and an intensity of 0.5 against the activity which was done for half

day.

ii) A person was considered working (employed) for the full day if he/she had worked for4 hours or more during the day.

iii) If a person was engaged in more than one of the economic activities for 4 hours or moreon a day, he/she was assigned two out of the various economic activities on which

he/she devoted relatively longer time on the reference day. In such cases, an intensity of

0.5 was given for each of these two economic activities.

iv) If the person had worked for 1 hour or more but less than 4 hours, he/she wasconsidered working (employed) for half-day and seeking or available for work

(unemployed) or neither seeking nor available for work (not in labour force) for the

other half of the day depending on whether he was seeking/available for work or not.

v) If a person was not engaged in any work even for 1 hour on a day but was

seeking/available for work for 4 hours or more, he was considered unemployed for theentire day. But if he was seeking/available for work for more than 1 hour and less

than 4 hours only, he was considered unemployed for half day and not in labour

force for the other half of the day.

vi) A person who neither reported any work nor was available for work even for half a

day was considered not in labour force for the entire day and was assigned one or two


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industry-occupation was taken as the one in which relatively longer time was spent during the

reference period by the person. To identify certain category of workers under Division 95(Private households with employed persons) of NIC 1998, six additional codes were used in

the survey viz., housemaid /servant (95001), cook (95002), gardener (95003),

gatekeeper/chowkidar/watchman (95004), governess/baby-sitter (95005) and others(95009). This apart, separate industry codes were used for recording the activities of letting of

building for residential purposes (70104) and letting of building for non-residential purposes

(70105).

2.13 Wage and salary earnings: Information on wage and salary earnings was collected

separately for each of the wage/salaried work recorded for a person in a day. Here, earningsrefer to the wage/salary income (and not total earnings taking into consideration of all otheractivities done) received/receivable for the wage/salaried work done during the reference

week by a wage/salaried employee and casual labourer. The wage/ salary received or

receivable may be in cash or kind or partly in cash and partly in kind. While recording theearnings following conventions were followed.

i) The wages in kind were evaluated at the current retail price.

ii) Bonus and perquisites such as free accommodation, reimbursement of expenditure

for medical treatment, free telephones, etc. evaluated at the cost of the employer or

at retail prices and duly apportioned for the reference week were also included inearnings.

iii) Amount receivable as 'over-time' for the additional work done beyond normalworking time was excluded.

It may be noted that in the survey, at most two activities could be recorded for a person in a

day. Therefore, it is possible that a person might have carried out two or more wage/salaried

activities in a day, but only one activity or two activities at the most, depending upon the timespent on those activities, was recorded. In that case, the wage/salary income only from that

activity(s) was collected and recorded separately, and not the total income of the person from

all the activities done for the entire day.

2.14 Industry of work: Certain probing questions to collect information on informal

employment was asked to all the workers, whether engaged in the usual principal status or in

the subsidiary status, engaged in non-agricultural sector as well as in the agricultural sector ascovered in the Economic Census 1998, i.e., excluding growing of crops, market gardening,

horticulture (industry group 011 of NIC -98) and growing of crops combined with farming of


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for the purpose of discussion of this report. The industry divisions 10-99 are for the non-

agricultural sector. However, the discussion on the existence of union/ association pertains tonot only employees but also self-employed workers in all the industry divisions of NIC-98,

i.e., NIC 98 codes 01 to 99.

2.15 Enterprise: An enterprise is an undertaking which is engaged in the production and /or

distribution of some goods and /or services meant mainly for the purpose of sale, whether

fully or partly. An enterprise may be owned and operated by a single household or by severalhouseholds jointly, or by an institutional body. The definitions of various types of enterprises

are given below:

2.15.1 Proprietary: When an individual is the sole owner of an enterprise it is a proprietaryenterprise. Own account production of fixed assets for own use, when produced by a singlemember, was classified as proprietary enterprise.

2.15.2 Partnership: Partnership is defined as the "relation between persons who have agreed

to share the profits of a business carried on by all or any one of them acting for all". Theremay be two or more owners, belonging to the same or different households, on a partnership

basis, with or without formal registration (where there is a tacit understanding about the

distribution of profit among the so-called partners). Own account production of fixed assets,when produced by two or more members belonging to the same or different households wasclassified as partnership enterprises. Thus, own account production of fixed assets by a group

of households for community use was classified as partnership enterprise.

2.15.3 Government/public sector enterprise: An enterprise, which is wholly owned/

run/managed by Central or State governments, quasi-government, institutions, local bodieslike universities, education boards, municipalities, etc. An enterprise was not treated as a

public sector enterprise if it was run on a loan granted by government, local body etc.

2.15.4 Private limited company: Private company means a company which by its articles:

(a) restricts the right to transfer its shares, if any,

(b) limits the number of its members to fifty not including-(i) persons who are in the employment of the company, and

(ii) persons who, having been formerly in the employment of the company, weremembers of the company while in that employment and have continued to be members

after the employment ceased; and

(c) prohibits any initiation to the public to subscribe for any share in, or debentures of, thecompany.

[Where two or more persons hold one or more shares in a company jointly, they shall, for


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2.15.6 Co-operative societies: Co-operative society is one that is formed through the co-

operation of a number of persons, recognised as members of the society, to benefitthemselves. In the process, the funds are raised by members contributions/investments and

the profits generated out of the societys activities are shared by the members. The

government itself in a government agency can also be a member or shareholder of a registeredco-operative society but this fact cannot render the society into a public sector enterprise for

the purpose of this survey.

2.15.7 Trust: An arrangement through which one set of people, the trustees, are the legal

owners of property which is administered in the interest of another set, the beneficiaries.

Trusts may be set up to provide support for individuals or families, to provide pensions, to runcharities, to liquidate the property of the bankrupts for the benefit of their creditors, or for the

safe keeping of securities bought by trusts with their investors money. The assets, which

trusts hold are regulated by law, these must be administered in the interests of thebeneficiaries, and not for the profit of the trustees.

2.15.8 Employer Households (i.e. private households employing maid servant, watchman,cook etc.): The households which are employing maid servant watchmen, cook, private tutor,

etc. was considered notionally as enterprise for the purpose of this survey and was classifiedas Employer households.

2.16 Location of workplace: The location of workplace for each of the working members of

a household was categorised as follows: (i) no fixed workplace or (ii) workplace located in (a)own dwelling, (b) own enterprise/unit/office/shop but outside own dwelling, (c) employers

dwelling, (d) employers enterprise/unit/office/shop but outside employers dwelling, (e)

street with fixed location, (f) street without fixed location, (g) construction sites or (i) others.

This was done for rural as well as urban areas.

2.17 Uses electricity for production: The information as to whether the enterprise in which

the person worked, used electricity for its production purposes was collected. It may be

mentioned here that use of electricity exclusively for purposes other than production like, for

comfort, security, illumination, etc., was not considered as the use of electricity by theenterprise for its production.

2.18 Type of job contract: It was ascertained for each employee whether for the job in which

he/she was engaged, there was any written contract or agreement in respect of duration ofemployment with his/her employer. For those who reported to have written job contract with

their employer, further probing was done in respect of the length of duration contracted, viz.,

for 1 year or less, for more than 1 year to 3 years and more than 3 years. If the contract of

Ch T


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2.19 Eligibility of paid leave: Paid leave included leave during sickness, maternity, or such

leave, as an employee was eligible to take without loss of pay, as per the conditions ofemployment. The situation was assessed excluding the paid off-days/holidays, which an

enterprise normally allows to its employees. Employees were classified as those with eligible

for paid leave and those without eligibility for paid leave.

2.20 Availability of social security benefits: It was ascertained from the employees whether

they were covered under any of the specified social security benefits or a combination of themwhich are arranged or for which contribution was made by the employer. For the purpose of

the survey the following schemes were considered as social security benefits:

only PF/ pension (i.e., GPF, CPF, PPF, pension, etc.).

only gratuity

only health care & maternity benefits

only PF/ pension and gratuity

only PF/ pension and health care & maternity benefits.

only gratuity and health care & maternity benefits

PF/ pension, gratuity and health care & maternity benefits

Those who were not eligible for any of the above social security schemes were considered as

not eligible for any social security benefits

2.20.1 The term Provident Fund (PF) included General Provident Fund, Contributory

Provident Fund, Public Provident Fund, Employees Provident Fund, etc. It may be mentioned

that coverage under any of these social security schemes meant that the employer contributed/

arranged/ paid in implementing the social security benefits for the worker. If an employeeoperated, in his/ her individual capacity, a PPF account and the employer is not contributing

in that account then it was not considered as a social security benefit. On the contrary, ascheme, in which both the employee and the employer contributed, was considered a socialsecurity benefit. When benefits were given by the employer for treatment of illness/ injury or

an employee was eligible for paid leave for a specified period of pre-natal/ childbirth/ post-

natal stages or the expenditure for maternity care or childbirth was borne by the employer asper the conditions of employment then such benefits was considered as health care &

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2.21 Method of payment: The method by which payments were received by the workers for

work done was recorded. The different methods of payment were, regular monthly salary,regular weekly payment, daily payment, piece rate payment and which could not be classified

in any of the above categories was considered as other method of payment.

2.22 Existence of union/association in the activity: Union/association meant any

registered/recognised body whose membership is open to a section of those engaged in a

specific activity or trade and whose main objective is to look into the interests of its members.Thus, besides the usual trade unions, this category also covered the association of owners,

self-employed persons, etc.

2.23. Informal sector and informal employment: A broad guideline regarding the coverageof informal sector and informal employment as enunciated in the 15

thInternational

Conference of Labour Statisticians (ICLS) and 17th

ICLS, are given below. Extracts of the

resolutions and guidelines concerning informal sector and informal employment are given inAnnexure II, at the end of Chapter Two.

2.23.1 AS per 15th

ICLS, the informal sectoris broadly characterized as consisting of:

(a) units engaged in the production of goods or services with the primary objective of

generating employment and incomes to the persons concerned. These units typically

operate at a low level of organization, with little or no division between labour andcapital as factors of production and on a small scale. Labour relations - where they

exist - are based mostly on casual employment, kinship or personal and social relations

rather than contractual arrangements with formal guarantees.(b) production units of the informal sector have the characteristic features of household

enterprises. The fixed and other assets used do not belong to the production units assuch but to their owners. The units as such cannot engage in transactions or enter into

contracts with other units, nor incur liabilities, on their own behalf. The owners have

to raise the necessary finance at their own risk and are personally liable, without limit,for any debts or obligations incurred in the production process. Expenditure for

production is often indistinguishable from household expenditure. Similarly, capital

goods such as buildings or vehicles may be used indistinguishably for business andhousehold purposes.

Thus, for statistical purposes, the informal sector, as per guidelines of 15th

ICLS is regarded

as a group of production units which, according to the definitions and classifications providedin the United Nations System of National Accounts, form part of the household sector as

household enterprises or, equivalently, unincorporated enterprises owned by households.

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member of informal producers co-operatives. The employment in the above categories may

be formal or informal depending upon the type of enterprises in which the workers areengaged or the nature of work they perform.

Accordingly, the informal employmentcomprises jobs held by:

own-account workers and employers who have their own informal sector enterprises;

contributing family workers, irrespective of whether they work in formal or informal

sector enterprises;

employees who have informal jobs ( for definition, see item (5) in paragraph 3 inAnnexure II) whether employed by formal sector enterprises, informal sector

enterprises, or as paid domestic workers by households;

members of informal producers cooperatives; and

persons engaged in the own-account production of goods exclusively for own final useby their household, such as subsistence farming or do-it-yourself construction of own

dwellings.

2.23.3 In the 61st

round survey, certain information for usual status workers engaged in

industry groups 012, 014, 015 and divisions 02 to 99, was collected to identify informalemployment. The relevant pieces of information which are useful in this respect are

employment status, type of enterprise, type of job contract, availability of social security

benefits, nature of job, existence of union/ association, etc.

2.24 Procedure followed for collecting employment and unemployment particulars in

different NSS rounds: In the annual rounds from 45th (July 1989-June 1990) to 59th (Januaryto December 2003) rounds, only activity status and industry of work according to usualprincipal status, subsidiary status and current weekly status approach were collected through a

few columns of the demographic block of the Consumer Expenditure Schedule (Schedule

1.0). Particulars of employment and unemployment according to the usual principal status andusual subsidiary status were collected in the annual rounds by following a similar approach as

in the quinquennial rounds. In the quinquennial rounds, particulars of current daily status of

the household members are collected and current weekly status is derived from them, whereas

in the annual rounds, current weekly status has been obtained through a direct query. In the60

thround, a separate schedule on employment and unemployment was canvassed for the first

time in an annual round and particulars on employment and unemployment was colleted in

the same manner as that of the quinquennial rounds.

Annexure-I


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ANNEXURE I

NATIONAL INDUSTRIAL CLASSIFICATION (NIC) 1998

(Description of industry groups 012, 014, 015 and all the industry divisions)

Tabulation Industry Groups/ Description

Category Division

A AGRICULTURE, HUNTING AND FORESTRY

01 Agriculture, hunting and related service activities

012 Farming of animals

014 Agricultural and animal husbandry service activities, except veterinary

activities.[This class includes specialized activities, on a fee or contractbasis, mostly performed on the farm.]

015 Hunting, trapping and game propagation including related service

activities

02 Forestry, logging and related service activities

B FISHING

05 Fishing, operation of fish hatcheries and fish farms; service activitiesincidental to fishing

C MINING AND QUARRYING

10 Mining of coal and lignite; extraction of peat

11 Extraction of crude petroleum and natural gas; service activities

incidental to oil and gas extraction, excluding surveying

12 Mining of uranium and thorium ores

13 Mining of metal ores

14 Other mining and quarrying

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Category Division

D MANUFACTURING

15 Manufacture of food products and beverages

16 Manufacture of tobacco products

17 Manufacture of textiles

18 Manufacture of wearing apparel; dressing and dyeing of fur

19 Tanning and dressing of leather; manufacture of luggage, handbags,saddlery, harness and footwear

20 Manufacture of wood and of products of wood and cork, except

furniture; manufacture of articles of straw and plating materials

21 Manufacture of paper and paper products

22 Publishing, printing and reproduction of recorded media

23 Manufacture of coke, refined petroleum products and nuclear fuel

24 Manufacture of chemicals and chemical products

25 Manufacture of rubber and plastics products

26 Manufacture of other non-metallic mineral products

27 Manufacture of basic metals

28 Manufacture of fabricated metal products, except machinery and

equipment

29 Manufacture of machinery and equipment n.e.c.*30 Manufacture of office, accounting and computing machinery

31 Manufacture of electrical machinery and apparatus n.e.c.

32 Manufacture of radio, television and communication equipment and

apparatus

33 Manufacture of medical, precision and optical instruments, watches and

clocks

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Category Division

E ELECTRICITY, GAS AND WATER SUPPLY

40 Electricity, gas, steam and hot water supply

41 Collection, purification and distribution of water

F CONSTRUCTION

45 Construction

G WHOLESALE AND RETAIL TRADE; REPAIR OF MOTORVEHICLES, MOTORCYCLES AND PERSONAL AND

HOUSEHOLD GOODS

50 Sale, maintenance and repair of motor vehicles and motorcycles; retailsale of automotive fuel

51 Wholesale trade and commission trade, except of motor vehicles and

motorcycles

52 Retail trade, except of motor vehicles and motorcycles; repair ofpersonal and household goods

H HOTELS AND RESTAURANTS

55 Hotels and restaurants

I TRANSPORT, STORAGE AND COMMUNICATIONS

60 Land transport; transport via pipelines

61 Water transport

62 Air transport

63 Supporting and auxiliary transport activities; activities of travel agencies

64 Post and telecommunications

J FINANCIAL INTERMEDIATION

65 Financial intermediation, except insurance and pension funding

66 I d i f di t l i l it

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Category Division

K REAL ESTATE, RENTING AND BUSINESS ACTIVITIES

70 Real estate activities

71 Renting of machinery and equipment without operator and of personal

and household goods

72 Computer and related activities

73 Research and development

74 Other business activities

L PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY

SOCIAL SECURITY

75 Public administration and defence; compulsory social security

M EDUCATION

80 Education

N HEALTH AND SOCIAL WORK

85 Health and social work

O OTHER COMMUNITY, SOCIAL AND PERSONALSERVICE ACTIVITIES

90 Sewage and refuse disposal, sanitation and similar activities

91 Activities of membership organizations n.e.c.

92 Recreational, cultural and sporting activities

93 Other service activities

P PRIVATE HOUSEHOLD WITH EMPLOYED PERSONS

95 Private households with employed persons

Q EXTRA TERRITORIAL ORGANISATIONS AND BODIES

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ANNEXURE II

Resolution concerning statistics of employment in the informal sector,

adopted by the Fifteenth International Conference of Labour Statisticians (January

1993)

[Extract]

Concept

5 (1) The informal sector may be broadly characterized as consisting of units engaged inthe production of goods or services with the primary objective of generating employment

and incomes to the persons concerned. These units typically operate at a low level of

organization, with little or no division between labour and capital as factors of productionand on a small scale. Labour relations - where they exist - are based mostly on casual

employment, kinship or personal and social relations rather than contractual

arrangements with formal guarantees.

(2) Production units of the informal sector have the characteristic features of household

enterprises. The fixed and other assets used do not belong to the production units as such

but to their owners. The units as such cannot engage in transactions or enter into contractswith other units, nor incur liabilities, on their own behalf. The owners have to raise the

necessary finance at their own risk and are personally liable, without limit, for any debts

or obligations incurred in the production process. Expenditure for production is oftenindistinguishable from household expenditure. Similarly, capital goods such as buildings

or vehicles may be used indistinguishably for business and household purposes.

Operational definitions

Informal sector

6 (1) For statistical purposes, the informal sector is regarded as a group of productionunits which, according to the definitions and classifications provided in the United

Nations System of National Accounts (Rev. 4), form part of the household sector ashousehold enterprises or, equivalently, unincorporated enterprises owned by households

as defined in paragraph 7.

(2) Within the household sector, the informal sector comprises (i) "informal own-account

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Household enterprises

7. According to the United Nations System of National Accounts (Rev. 4), householdenterprises (or, equivalently, unincorporated enterprises owned by households) aredistinguished from corporations and quasi-corporations on the basis of the legal

organization of the units and the type of accounts kept for them. Household enterprises

are units engaged in the production of goods or services which are not constituted asseparate legal entities independently of the households or household members that own

them, and for which no complete sets of accounts (including balance sheets of assets and

liabilities) are available which would permit a clear distinction of the production

activities of the enterprises from the other activities of their owners and the identificationof any flows of income and capital between the enterprises and the owners. Household

enterprises include unincorporated enterprises owned and operated by individual

household members or by two or more members of the same household as well asunincorporated partnerships formed by members of different households.

Informal own-account enterprises

8 (1) Informal own-account enterprises are household enterprises (in the sense of

paragraph 7) owned and operated by own-account workers, either alone or in partnership

with members of the same or other households, which may employ contributing familyworkers and employees on an occasional basis, but do not employ employees on a

continuous basis and which have the characteristics described in subparagraphs 5 (1) and

(2).

(2) For operational purposes, informal own-account enterprises may comprise, dependingon national circumstances, either all own-account enterprises or only those which are not

registered under specific forms of national legislation.

(3) Registration may refer to registration under factories or commercial acts, tax or social

security laws, professional groups' regulatory acts, or similar acts, laws, or regulations

established by national legislative bodies.

Enterprises of informal employers

9 (1) Enterprises of informal employers are household enterprises (in the sense of paragraph 7) owned and operated by employers, either alone or in partnership with

members of the same or other households, which employ one or more employees on a

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(ii) non-registration of the enterprise or its employees.

(3) While the size criterion should preferably refer to the number of employees employed

on a continuous basis, in practice, it may also be specified in terms of the total number ofemployees or the number of persons engaged during the reference period.

(4) The upper size limit in the definition of enterprises of informal employers may vary

between countries and branches of economic activity. It may be determined on the basisof minimum size requirements as embodied in relevant national legislations, where they

exist, or in terms of empirically determined norms. The choice of the upper size limit

should take account of the coverage of statistical inquiries of larger units in the

corresponding branches of economic activity, where they exist, in order to avoid anoverlap.

(5) In the case of enterprises, which carry out their activities in more than oneestablishment, the size criterion should, in principle, refer to each of the establishments

separately rather than to the enterprise as a whole. Accordingly, an enterprise should be

considered to satisfy the size criterion if none of its establishments exceeds the specified

upper size limit.

(6) Registration of the enterprise may refer to registration under specific forms of

national legislation as specified in subparagraph 8 (3). Employees may be consideredregistered if they are employed on the basis of an employment or apprenticeship contract

which commits the employer to pay relevant taxes and social security contributions on

behalf of the employee or which makes the employment relationship subject to standardlabour legislation.

10. For particular analytical purposes, more specific definitions of the informal sector

may be developed at the national level by introducing further criteria on the basis of the

data collected. Such definitions may vary according to the needs of different users of thestatistics.

Population employed in the informal sector

11 (1) The population employed in the informal sector comprises all persons who, during

a given reference period, were employed (in the sense of paragraph 9 of resolution Iadopted by the Thirteenth International Conference of Labour Statisticians) in at least one

informal sector unit as defined in paragraphs 8 and 9, irrespective of their status in

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should be excluded from the scope of the informal sector for the purpose of statistics of

employment in the informal sector. Depending on national circumstances, an exceptionmay be made in respect of households employing domestic workers as referred to in

paragraph 19.

16. For practical reasons, the scope of the informal sector may be limited to household

enterprises engaged in non-agricultural activities. With account being taken of paragraph

14, all non-agricultural activities should be included in the scope of the informal sector,irrespective of whether the household enterprises carry them out as main or secondary

activities. In particular, the informal sector should include secondary non-agricultural

activities of household enterprises in the agricultural sector if they fulfil the requirements

of paragraphs 8 or 9.

17. Units engaged in professional or technical activities carried out by self-employed

persons, such as doctors, lawyers, accountants, architects or engineers, should beincluded in the informal sector if they fulfil the requirements of paragraphs 8 or 9.

18 (1) Outworkers are persons who agree to work for a particular enterprise, or to supply

a certain quantity of goods or services to a particular enterprise, by prior arrangement orcontract with that enterprise, but whose place of work is not within any of the

establishments, which make up that enterprise.

(2) In order to facilitate data collection, all outworkers should be potentially included in

the scope of informal sector surveys, irrespective of whether they constitute production

units on their own (self-employed outworkers) or form part of the enterprise, whichemploys them (employee outworkers). On the basis of the information collected, self-

employed and employee outworkers should be distinguished from each other by using thecriteria recommended in the United Nations System of National Accounts (Rev. 4).

Outworkers should be included in the informal sector, or in the population employed in

the informal sector, if the production units, which they constitute as self-employedpersons or for which they work as employees fulfil the requirements of paragraphs 8 or 9.

19. Domestic workers are persons exclusively engaged by households to render domesticservices for payment in cash or in kind. Domestic workers should be included in or

exclu

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Nsso Informal Sectors and Conditions of Employment in India 2004 05