INDIAN ECONOMY

India Uninc.
Group 3
DIVYA NAYAK
19/254
NIKITA GULATI
19/257
HITAISH KUMAR 19/258
KUNAL SAPRA
19/266
MADHU GARG
19/267

India Uninc

India Uninc
Most significant but most overlooked and underestimated
the largest contributor to national income(more than one third of the total)
Our socio-economic space is overwhelmingly informal
Play crucial role in providing employment to rural migrants
Disadvantages: low productivity activities, small size of operation, poor level of
technology
Advantages: Flexibility to remain small as opposed to stringent labour laws in the formal
sector
India Incorporated is a very small aspect of the economy

NAS defined Unorganized as all

unincorporated enterprises and
household industries other than the
organized ones which are not
regulated by any of the acts and
which do not maintain annual
accounts and balance sheets.

Largest contributor to National

InIncome
India, Unincorporated Sector: 45% compared to Corporate sector 15%
In US Corporate sector contribution is 70% of GDP
NSSO Survey Results:
Economic and operational characteristics of unincorporated non-agricultural enterprises in
manufacturing, trade and other service sector at the national and state level.
The survey considered following broad categories:
1. Manufacturing enterprises 2. Proprietaries and partnership enterprises 3.
Trusts, self help groups
4. Non-profit institutions
66% of them are Own Account Enterprises (an enterprise which is run without any hired
worker employed on a fairly regular basis)
Establishment employing at least one hired worker on a fairly regular basis
During 2010-11, 5.77 crore unincorporated non-agricultural enterprises excluding
construction were estimated at all India level. 30% in manufacturing, 36% were in trading,
34% were in service sector.
Only 2% were operated on a partnership basis
Aggregated annual gross value added by the unincorporated non-agricultural enterprises

Largest contributor to National Income

Share of Unincorporated in different sectors
Within manufacturing, the share of the non-corporate sector is nearly 41%.
Aggregated annual gross value added by the unincorporated non-agricultural enterprises was estimated at rs
628356 crores. This comes to nearly 10% of GDP during the period
In service activities, the share of the non-corporate sector is more than 75% and that of the private corporate sector
is miniscule
At the all India level annual gross value added per enterprise in un-incorporated non-agricultural sector was 108951

Comparison with China

Qui village in china and SEWA in Indias western part of Gujarat.
Importance to informal sector helped China met its MDG 14 years before the deadline.
Street sweepers, Medical facility, Representation in government, Benefits to villages like television, cell
phones
Agricultural reforms, Hukou registration system

Capital Formation by
Uninc.
Gross fixed capital formation(GCF)
Value of acquisitions of new or existing fixed assetsby the business
sector, governments and "pure" householdslessdisposals of fixed
assets
Component of the expenditure ongross domestic product(GDP)

Trends and Analysis for capital formation:

Gross Capital Formation Steadily Improved because of increased
savings rate
Private Investments have improved unlike public investments
Household investments account for 32% of total investments
Majorly Includes individuals and non-corporate business bodies etc.

Unorganized sector has nearly 50% of the GCF in the economy

Role of Government
Private sector depends on govt. for facilitation through banking and
capital markets
Govt. reduced their increasing pension burden by Defined
Contribution plan , 2006
Weak database for GCF and left unaccountable in Govt. budgets

References
http://www.klgates.com/files/Publication/8b2c8b5b-6b
35-4f39-b64c-607ac8364252/Presentation/PublicationAt
tachment/b517fe20-916b-4e35-9214-6c5ce9d3d2a5/436.pd
f
http://fiib.edu.in/images/fbr/India-Uninc..pdf
http://www.indiaclub.org.sg/archives/uninc.pdf
https://en.wikipedia.org/wiki/Gross_fixed_capital_formati
on
http://www.dhanbank.com/pdf/reports/GCF-Nov%204-20
11.pdf
Ramachandran Vaidyanathan,2006