Changing Employment and Enterprise Structure in Gujarat: Niti Mehta 1

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1 Changing Employment and Enterprise Structure in Gujarat: Niti Mehta 1 I. Introduction An examination of the sectoral workforce estimates derived from the NSSO work participation rates (UPSS) shows that non-farm employment share in the total economy has shown a steady rise, from 36 per cent ( ) to 52.5 per cent ( ). The annual growth rate of non-farm employment showed significant acceleration in 2000s decade (from 0.9 per cent (in the 1990s decade) to 3.8 per cent ( to ) and nearly 5.6 per cent from to Given the important role that the unorganised sector plays in sustaining this growth it is essential to view the relative buoyancy of employment generation in the rural unorganised sector activities. Such activities are likely to show regional contrasts in performance as these are rooted in the locational resource endowments. The unorganised activities in the non-agricultural economy are amorphous in nature and subject to rapid changes that occur due to high mobility or morbidity of smaller units and also on account of birth of new units. The loss of jobs in some industries and gains experienced by others generally show considerable spatial variations. Further given the fast pace of urbanisation many industries are possibly shifting from rural to urban locations and may also be undergoing changes related to their size. Given the above, in this paper we use the information available from Economic Census for studying the vibrant and promising sectors in terms of numbers and employment across locations and update for the recent decades. This kind of examination of dynamic activities has importance in devising support policies for infrastructure, power, credit, technology etc. in order to strengthen the base of unorganised activities that are possibly gaining jobs. Also, as the unorganised sector of the economy continues to absorb a disproportionate share of the nonagricultural workers (Mehta and Kashyap, 2002). Dynamic activities can be identified on the basis of labour productivity, output levels or the employment growth. We have tried to arrive at the dynamic sectors based on the share of employment, by comparing the information available from Economic Censuses (EC) of 1990, 1998 and 2005 for Gujarat. While our analysis is limited to the one-digit level of National Industrial Classification and covers only the broad activities within the non-agricultural sector, such employment accounting using database furnished by EC can be used to study the situation for states and districts. It needs clarification at this juncture that with the launch of the EC, information on workers available from the decennial census became highly aggregated as the non-farm workers are clubbed under other workers. The information on the census household industry workers also does not tell much about the nature of jobs. The activity wise details of employment from the NSSO though detailed and robust, do not throw light on size of enterprises, extent of hired workers and other techno-economic characteristics with state and sectoral disaggregation. Such information on enterprises is available from the EC and the follow up Enterprise Surveys. However, in the EC the numbers of workers engaged in non-agricultural enterprises at the aggregate level are nearly 29 per cent less than that enumerated by the 1 Professor, Sardar Patel Institute of Economic & Social Research (SPIESR), Thaltej Road, Ahmedabad

2 Population Census. This difference is enormous and could be because the EC excludes home based workers. For estimating sectoral per capita incomes we have for more recent period relied on the all-india survey of unincorporated non-agricultural enterprises in manufacturing, trade and other service sector (excluding construction) conducted by the NSS (67 th Round, ). The survey categorises non-agricultural activities as manufacturing and trading sectors. The remaining enterprises have been clubbed in other service sector, but exclude mining and quarrying, utilities, construction, public administration, and personal services. In the next section we trace the overall employment scenario in Gujarat. The share of activity groups in the net domestic product has been examined next together with the changes over time. In the subsequent sections an attempt is made to identify the activities that: i) have an important share in the total non-agricultural employment, ii) are experiencing locational shifts (between rural and urban areas) and iii). are experiencing size substitution. The last section summarises the findings and draws policy inferences. II. Overall Scenario 2 We look at the aggregate insights for employment from different data sources for Gujarat. i). Gujarat has recorded a falling share of the primary sector in the Net State Domestic Product (NSDP) from 23.7 per cent in to 14.7 per cent in The non-primary sectors have recorded high growth rates from onwards. These developments have led to a growth accelerating impact on the state economy. ii) It is seen that within the secondary sector, specifically manufacturing and construction, output levels have shown positive and significant growth acceleration in the 2000s decade (at 12 and 14 per cent per annum respectively). Transport and trade sectors within the tertiary sector have also shown growth acceleration. iii). Census population tables for 2001 to 2011 show a shift in the rural and urban composition of workforce. The participation of marginal workers in rural areas declined from 12 to 10.6 per cent while that of main workers declined more steeply (from 65 to 58 %), leading to the fall in the total workers (by 8 percentage points). In absolute terms nearly 0.6 million workers were added in rural areas while in urban areas the increase was 3 million. Even though the urban marginal work participation rates doubled (from 1.8 to 2.8 %), in absolute terms in urban areas the additions were more pronounced in the category of main workers (by 2.6 million), i.e. 88 per cent of the incremental workers in urban areas. iv). Unlike urban female work participation rates, that for the rural females (both main and marginal workers) declined; the latter more steeply. Chand and Srivastava (2014), using NSSO data show that rural workforce participation rates at the all India level for both males and females declined between to , more steeply for females (by 6.7 per cent points). Using census (2001, 2011) data Kasturi (2015) in contrast, show that in rural areas WPR declined for both males and females, but increased in urban areas, significantly for urban females. v) Unlike the previous decade, the high growth of non-primary sectors, has led to commensurate high level of urbanisation (42.5 %), with urban population showing a 2 For detailed tabular information that forms the basis of this section see Mehta (2016). 2

3 growth of 36 per cent. From though the concentration of urban population in class 1 cities has risen from 68 to 72 per cent, the drivers of urbanisation are the class 6, 5, and 4 towns- growing at annual rates of 5.1, 9.8 and 5.3 per cent respectively. vi).other notable feature of the Gujarat economy in this period has been that unlike the scenario in the last decade, growth of workforce (1.5 per cent per annum) has been lower than the population growth rate (1.8 per cent per annum). Gujarat s performance in rural poverty reduction (by 17.6 per cent points from to ) is marginally better than the national average (16.7 per cent points). The reduction in urban poverty is slower (by 10 percentage points), and lower than the national figure (12 percentage point reduction). vii). The other feature is that large number of rural residents commute to work in urban areas, particularly in the more urbanised states (Chandrashekhar, 2011) and working primarily in construction, manufacturing and trade related activities. From NSSO ( ) employment data, it can be seen that in Gujarat 10.3 per cent of rural residents report urban as their place of work. Changes in Workforce Composition: The scenario presented above is mixed and throws several challenges in the nature of generating adequate livelihood opportunities for the workers in the rural areas. The growing importance of smaller settlements demands timely action to ensure delivery of services and jobs for the workers diversifying out of the primary sector. The nature of economic transition will be further crystallized once we view the changes in workforce composition. Table 1. Distribution of Rural (Main) Workforce by Activities ( ) (per cent) Category of Occupations Cultivators Agricultural labourers Activities allied to Agri. 3.6 Household Industry Other Worker Total Source: Census of India We examine the changes in the composition of workforce over the twenty year period from 1991 to Census distribution of main workers over this period show that cultivators decreased by 7.6 percentage points. The share of agricultural labourers has swelled by 4.7 percentage points pointing towards rising landlessness in rural Gujarat. Evidence points towards rural occupational diversification in the primary sector. Although detailed breakup of occupational categories is not given in the census of 2011, evidence provided by the EC (1998, 2005) suggests that employment in livestock, forestry, hunting, fisheries etc. recorded gains by nearly 0.3 million workers in rural Gujarat. Despite the under-enumeration of workers in the EC, apparently 1.3 million workers in the allied sector comprise around 8.4 per cent of the total rural workers in Employment in rural household industries sector, already miniscule has recorded further decline. 3

4 Examination of industry-wise data generated by various rounds of NSSO Employment and Unemployment surveys (UPSS) for Gujarat also give insight into the changes over time. Up to the relative importance of the primary sector in rural areas increased. Industries sector witnessed a reduction by nearly 2.5 percentage points, even though tertiary activities, mainly trade, transport, storage etc. recorded enhanced share of workers. Between to , the share of primary sector in the workforce declined, and occupational diversification, at least at the aggregate level is gaining vigour. Despite its declining share, the primary sector in rural areas continues to engage three-fourths of the workforce. Non-primary sectors that have gained workers in the 2000s decade are construction, trade and hotels followed by manufacturing. Thus in Gujarat, two sets of emerging sectors can be identified; one belonging to the primary sector and the other to the non-farm sectors. Allied agricultural activities represent the promising activities in the rural primary sector. It would be useful to examine and identify the non-primary sectors and the activities that are gaining in importance. In the subsequent sections we deal with the emerging activities belonging to the non-primary sector. Share of Industry groups in the Net State Domestic Product: The share of agriculture in the Gujarat s output is declining, far more sharply after Manufacturing sector output depicts a more volatile trend. Share of output from manufacturing sector dipped to the lowest in but recovered to 27 per cent in After , its share declined again but there was a significant rise in the output coming from trade, hotels, transport, and communications. The combined net state domestic product (Table 2) emanating from these sectors increased from 19 per cent to 33 per cent between 1999 and Growth in trade is related to the increasing income levels and enhanced spending on a variety of goods and services. Liberalisation of the economy has also bestowed maximum benefit to modern sectors like communications, transport, hospitality sector, financial services and real estate, causing faster growth in these sectors. The per capita NSDP for each subsector for Gujarat shows interesting pattern. 3 For the purpose of analysis per capita NSDP has been derived using estimates of workers from the EC. Since the enterprise survey of excludes workers in construction and public administration etc., strict comparability across the years may not be ensured. It was observed that in the first period (1998 to 2005) annual growth in per capita output for tertiary sector and manufacturing was around 7 per cent. The largest increase in per capita income was observed to be from construction sector, possibly due to a downturn in the estimated workers in Per capita income from transport, storage and communications also recorded annual growth exceeding 11 per cent, followed by trade at 7 per cent. Analysis for comparable activities in , show that manufacturing output recorded negative growth, while income from the service sector showed high acceleration. 3 For quantitative details, Ibid. 4

5 Table 2. Output Share of Industry Groups in NSDP ( prices) (per cent) No. Industry Group * Agriculture, Forestry, logging, fishing, mining & quarrying 1.1 Of which agriculture & animal husbandry 2. Manufacturing, Electricity, gas & water, Construction 2.1 Of which Manufacturing Trade, hotels & restaurants, transport, storage and communications Banking, insurance, real estate, business services 5. Public administration & other services Tertiary Note: * at prices Source: Socio-Economic Review of Gujarat State, Bureau of Economics & Statistics, GoG, Overcrowding of workers in the manufacturing sector does not bode well for workers as seen from the declining productivity levels. It is imperative that the sector witnesses technological up-gradation to increase productivity. Household based industry in addition also requires support in the nature of raw materials, credit etc. The observed trends if continued for long may have detrimental impact on technological up-gradation and even adversely affect the competitive edge of the state in manufacturing. Trade seems to be the last resort for the workers spilling out from the primary activities and a positive feature is the continued acceleration of output from this sector. Rising productivity also indicates that employment increase in trade may not be distress induced. Possibly foreign investments and organised chain retailing has had a positive impact on the economy. The communications revolution and growth in transportation - both formal and informal is a welcome development, engaging workers at increasing productivity levels. Of late the financial and real estate sector in rural Gujarat is expanding very fast. However tertiary sector requires skilled manpower to sustain its growth momentum. A flourishing agriculture sector in the 2000s decade seems to have fuelled the growth in the service activities. The process is helped by rural to urban migration of workers not finding adequate livelihood opportunities in the rural areas; nearly 3 million workers were added in urban areas. While 88 per cent of the incremental workers in urban areas were main workers, share of marginal urban workers also doubled. The labour absorbing capacity of agriculture is limited. Labour saving cropping pattern adjustments and increasing mechanisation of field crop operations need to be reiterated. Livestock and animal husbandry in Gujarat threw up additional work in rural areas that has lent momentum to the diversification of primary sector- a healthy development for the state economy. III. Disaggregated view of Employment in Non-Agricultural Sector In the previous section we have elaborated on the activity wise details for Gujarat. A disaggregated analysis of information would point towards the industries within the non-farm sector having potential for employment generation. Earlier studies have identified emerging 5

6 industries on the basis of labour productivity and employment growth, gross value added and overall productivity levels. We have however, tried to arrive at such sectors on the basis of the share and growth in employment, size substitution and the rural/urban location of the non-farm activities. We attempt a comparison of the economic activities over two periods by Economic Census for 1990 to 1998 and 1998 to In the EC the crop and plantation sector is excluded, but information is available on allied agricultural enterprises. The EC defines an Establishment as an enterprise having at least one hired worker on a fairly regular basis. An Own Account Enterprise (OAE) is one that is normally run by household members and does not engage any hired worker on a regular basis. Size Structure of Non-Farm Employment and Rural-Urban Composition: Evidence from EC shows that in rural Gujarat during 1998 to 2005, the unorganised non-agricultural enterprises increased in terms of numbers as well as employment therein. There was a higher concentration of non-agricultural Establishments in urban areas both with regard to the number of units and workers employed, while a larger share of OAEs were located in the rural areas. Unlike the 1990s, the number of OAEs and employment was expanding in the period under consideration ( ). Evidence for from the Survey of Unincorporated Non-agricultural Enterprises (NSSO 67 th Round) indicates that manufacturing, trade and other service sector Establishments are getting concentrated in urban areas. Concentration of OAEs is also far greater in urban Gujarat than rural, though in rural areas the share of OAEs is more than the Establishments. 4 The activity wise rural-urban distribution of non-agricultural workers is shown in Table 3. Between 1990 and 1998 employment share in all enterprises (OAEs and Establishments) were getting more urbanised. Jobs in utilities sector, unspecified activities, retail trade and communications shifted over to urban areas, while construction and mining became dominantly rural based activities. During this period the higher annual rate of growth of workers in nonagricultural sector in urban areas, was contributed by the growth in OAEs. While employment in establishments in urban areas was not growing, the pace declined in rural areas. In the second period (1998 to 2005) it can be observed that urban areas continued to depict a dominant albeit declining share. During 1998 mining & quarrying, construction and electricity, gas and water related activities were dominant in rural areas. By 2005, only mining & quarrying remained as a dominantly rural based activity. Within the secondary sector, manufacturing and construction were also shifting from rural to urban locations. In contrast service sector seen in isolation though dominantly urban in 2005, depicts a declining share here. Shift to rural areas was quite steep for wholesale trade, transport, communication, and the remaining service activities. 4 See Mehta (2016) for quantitative information. 6

7 Table 3. Change in Rural - Urban Distribution of Non Agricultural Employment in all Enterprises by Activity, ( ) Economic Census (1990, 1998, 2005), GoG, (% share of total (rural+urban)) Industry Group/ Location Rural Urban Rural Urban Rural Urban Mining & Quarrying Manufacturing Electricity, Gas & Water Construction Wholesale Trade Retail Trade Restaurants & Hotels Transport Communication Financial, Insurance, Real Estate & Business Services Community, Social & Personal Services Other Activities Total Non-Agricultural Gandhinagar. Source: Reports of the Third, Fourth and Fifth By 2005 urban areas offered an increasing share of jobs in Establishments engaged in construction sector only. Establishments engaged in trade, hotels, transport, storage, communications and other services were increasingly getting concentrated in rural areas. Jobs in manufacturing Establishments, along with that in electricity, gas and water dominantly urban in nature, do not reveal any startling changes between 1998 and The annual rate of increase of workers in all the unorganised non-agricultural enterprises was higher in rural (2.8%) than in urban areas (1.3%). Much of this was contributed by the growth in Establishments (4.2%). While employment growth in rural OAEs was nearly stagnant, the pace decelerated in urban areas. The changes in activities by size of enterprises are discussed in detail elsewhere (Mehta, 2016). Share of Industry Groups in Total Non-Agricultural Employment: Employment gains in secondary and tertiary sectors between 1990 and 1998 were nearly absent. In order to identify the non-farm activities that are important in terms of their presence across rural and urban locations as well as employment shares, we look at information given in Table 4. Activity -wise employment shares coming from all enterprises (OAE and Establishments) indicated decline in employment share in secondary activities, noticeably in manufacturing, decline being sharper in case of household based manufacturing (in rural and urban areas). Construction, trade, transport (rural areas) and communication (in urban areas) were emerging as important employment generators. Construction and retail trade were the only activities showing gains within the establishments (hiring workers), especially in rural areas. Individual based transport activities (OAEs) and personal /community services also gained in importance in rural areas. 7

8 Between 1998 and 2005 the employment in secondary and tertiary sector activities gained nearly 13 per cent, the gains being far higher in rural areas (21%) than in the urban areas (by 9.7%). However, it is essential to identify the non-agricultural activities that are important in terms of their presence in urban and rural areas as also their overall employment potential. Such sectors within the rural non-farm economy require attention of policy. Further the base of the demand driven non-farm activities needs to be strengthened, given the increased trend of relocation of enterprises to rural areas. Gujarat is facing enhanced degree of agricultural commercialisation that has been an important contributor to the overall growth. Census 2011 results have indicated that connectivity to rural areas has improved and many villages are showing urban characteristics. Possibly the rural-urban divide is becoming rather thin. We also need to explore what scale of villages are offering jobs in the rural non-farm sector, as possibly a large share of villages satisfying the census criteria of urban designation may be eligible to become census towns. Further given the problems experienced by bigger urban centres in the nature of over-congestion, pollution and other negative externalities, the rural areas have to develop as receptacles of non-farm activities. Table 4. Share of Employment in Non - agricultural Enterprises (OAE+ Establishment) by Activity Type & Location, (% share to total employment) Industry Group/ Location Rural Urban R+U Rural Urban R+U Rural Urban R+U Mining & Quarrying Manufacturing Elect, Gas & Water Construction Wholesale Trade Retail Trade Restaurants & Hotels Transport & Storage Communication FIRE etc Services Community Services Total Non-Agricultural Source: Reports of the Third, Fourth and Fifth Economic Census (1990, 1998, 2005), GoG, Gandhinagar. Changes in the activity-wise shares of employment between in all enterprises (OAE and Establishments) show that manufacturing and trade continued to be the dominant nonagricultural activities (Table 4). The combined share of these activities in the overall employment increased from 60 to 66 per cent. Services that provided employment to 30 per cent of the non-agricultural workforce in 1998 registered remarkable decline in importance, reducing to 25 per cent by In the rural areas, employment share increased noticeably in trading especially retail trade, together with transport and storage related enterprises. In the urban areas also employment share of the trading sector has increased and to a lesser degree of enterprises devoted to communication and financial services. 8

9 Employment shares in Establishments and OAEs are not discussed here separately (refer Mehta, 2016), however it may be highlighted that employment share in large non-agricultural Establishments using hired labour engaged in wholesale trade increased from 3.4 to 5.7 per cent and in retail trade from 11.8 to 21 per cent, these being the only activities showing gains within the Establishment sector, especially in the rural areas. Amongst the OAEs, petty retail traders gained in employment share by nearly seven percentage points, again the gains being more in rural areas than urban. Decline in the share of rural household based manufacturing and personal/community services (both by 7 % points) was quite drastic in rural areas. Size Composition of Non Agricultural Enterprises: In order to examine the changes in size of enterprises, the period from 1990 to 2001 was divided into two sub-periods. Some contrasting trends are visible (For details Mehta, 2016) to 1998: Employment in own account non-agricultural enterprises increased by 5.7 percentage points for the state during this period. The shift in employment towards smaller, family run enterprises was sharper in case of rural (by 6.8 per cent points) than urban areas (5.5 per cent points). Such changes were not obvious in case of manufacturing sector in both rural and urban areas. Petty retail traders and communication activities were increasing in size and this trend was evident to a greater degree in rural areas. In rural areas much of the service activities were becoming smaller in size and individual based. For the remaining activities (i.e., mining, utilities, transport, storage) size substitution towards bigger establishments, attracting hired workers was occurring to 2005: In contrast to the earlier period, during 1998 to 2005 the employment in own account non-agricultural enterprises declined by around 5 percentage points for the entire economy. This shift in employment towards larger enterprises run with hired workers was sharper in case of rural (6 per cent points) than urban (4 per cent points). Such changes were obvious in rural areas in case of manufacturing sector, construction, wholesale and retail trade, restaurants & hotels, and community and personal services. Apparently with the exception of communication and service activities, all the non-agricultural enterprises in rural Gujarat were experiencing size substitution from being individual based activities to establishments run on hired workers. For mining, electricity, gas and water characteristically larger enterprises functioning with the help of hired workers, it was evident that even in these activities size substitution towards smaller individual run enterprises was occurring. Such a trend was sharper in case of rural Gujarat. IV. Emerging activities in the Non-Agricultural Sector: 1990 to 2005 This section provides a comparison of the promising sectors in Gujarat during the period spanning 1990 to 2005 in terms of sectoral employment shares. Table 5 shows the classification of enterprises based on the growth experience of employment between and (in descending order).the activities that were gaining in terms of their relative shares in 9

10 the non-agricultural workforce in rural areas during the 1990 decade were retail trade, construction and transport related activities. Rural manufacturing activities reported a large decline in its importance (-3.4 per cent points). Urban area during this period did not show a much disparate picture. Gains for retail trade (by 4.3 per cent points) were quite significant followed to a much lesser degree by transport, construction and community/personal services (0.9 to 0.8 per cent point change). Urban areas registered a much larger scale of decline in the importance of manufacturing activities within the non-agricultural workforce (nearly 5 per cent point change). Table 5. Classification of Non-Agricultural Activities (Employment in Establishments and OAEs) by their relative growth experience, Growth in Employment Share (Percentage change), Urban Rural Increase in Share Decline in Share Increase in Share Decline in Share Retail trade (4.3) Manufacturing (4.7) Retail trade (3.3) Manufacturing (3.4) Transport (0.9) Storage (0.5) Construction (2.4) Com & Per services (1.1) Com & Per services (0.9) FIRE (0.3) Transport (1.9) EGW (0.3) Construction (0.8) Mining (0.2) Mining (0.7) FIRE (0.3) Wholesale trade (0.6) Restaurants (0.2) Wholesale trade (0.4) Storage (0.2) EGW (0.2) Communication (0.2) Communication (0.2) Restaurants (0.1) Growth in Employment Share (Percentage change), Urban Rural Increase in Share Decline in Share Increase in Share Decline in Share Retail trade (6.5) Com & Per services (8.3) Retail trade (8.3) Manufacturing (9.3) Wholesale trade (2.4) Construction (0.7) Wholesale trade (2.2) Communication (8.3) FIRE (0.6) Transport (0.7) Transport (1.5) Construction (2.3) Communication (0.3) Manufacturing (0.3) FIRE (0.8) Mining (0.5) EGW, Mining (0.1) Restaurants (0.1) Com & Per services (0.3) Note: Figures in brackets are the percentage point change in employment share of each activity to total employment in respective period. FIRE: Financial, insurance, real estate & business services Com & Per: Community, social and personal Services EGW: Electricity, gas and water. Source: Table 4 In the subsequent period ( ), in rural areas trading activities, retail more than wholesale trade continued to be the dominant employment generator within the non-farm sector, followed by transport. Financial and business services were gaining importance in rural Gujarat during this period. The pace of decline in importance of rural manufacturing (9.3 per cent points), communication (8.3 per cent points) and construction accelerated over the last decade. During , urban areas do not show much different trend. Retail trade followed by wholesale trade, financial services and communication activities gained in importance in urban areas. However one glaring change was the significant decline in the share of employment within community services (by 8.3 per cent points) in urban Gujarat. Construction, transport sector and manufacturing activities too lost employment shares in urban areas. While the changes in activity-wise size of enterprises is discussed elsewhere (Mehta, 2016), the above table clearly 10

11 shows that besides the allied activities, the tertiary sector activities are forging ahead in both the periods. These are the promising sectors in the state. In rural Gujarat, along with commercialisation of agriculture, diversification within the primary sector as seen through the increased employment in allied activities such as, forestry, fishing, animal husbandry etc. is an on-going process. Our findings indicate that in rural areas of Gujarat the activities in the non-primary sector that are experiencing growth in share and creating more job prospects are retail and wholesale trading, communications followed by transportation/storage sector. Financial and business services are gaining importance in both rural and urban areas. Shift from urban to rural areas has been observed in trading, transport & storage, communications and financial services. Of late small manufacturing enterprises are also shifting to rural areas. The share of trade, hotels and restaurants, storage and communication in total employment in 2005 was 42 per cent, and their share in NSDP was 26 per cent. The per capita NSDP from these activities has been accelerating at 7 per cent per annum (higher than that of tertiary sector in totality). Per capita NSDP from transportation sector grew at 11 per cent and communication activities at 12 per cent. Some of these activities are concentrated in the self- employment, particularly in case of petty trading, land transport, communication and also personal services. Nonetheless these are the activities which are operating as depository of surplus labour and where the surplus rural labour is finding a space. It remains for the state to create an environment where these activities become productive and viable and get integrated with the mainstream economic sectors. These are the dynamic sectors, which could receive greater policy thrust to strengthen their base. Since these are drawing the largest share of the workers outside agriculture, promotional efforts geared towards technological up-gradation leading to greater modernization coupled with support towards credit, power, etc., need to be stepped up. The rural economy seems to be enmeshed with the rest of the economy in Gujarat as can be observed from the rather uniform pattern of employment growth. In several major state economies, the structure of employment in the rural and urban areas is moving closer or is converging after liberalisation, but Dholakia et. al (2014) find that in the states of Gujarat and Maharashtra, the structural difference between urban and rural areas has remained almost constant over time. In the recent years both are emerging as the states with highest structural differences between the two areas. It is not that the employment pattern in these economies has remained stagnant over time, but the changes in them have been of similar dimension in both the areas. The paper to an extent, by using Economic Census data, has identified the dynamic/promising activities in the non-agricultural sector at the state level. Apparently, these activities are very important for absorbing non-agricultural workforce in Gujarat, even though the reasons for their emergence may not have been dealt with in earnest. At this stage we confess that further disaggregated analysis is required. The present study would gain from an analysis of information available from the economic tables of census, (at 2-digit level of NIC) for total and urban areas at the levels of state, districts and urban agglomerations. This information pertains to the main 11

12 and marginal workers by sex and class of workers (employer, employee, single, family worker). The methodology can also be extended for the activities that are dynamic at one digit level of NIC, attempt could be made to look at the employment shares of promising sectors at NIC 2- digit level. A more detailed analysis is required to identify the non-farm activities that have a bleak future as against those that might flourish in the days to come. References Chand, Ramesh and SK Srivastava (2014). Changes in the Rural Labour Market and Their Implications for Agriculture, Economic and Political Weekly, 49(10). Chandrasekhar, S (2011). Workers Commuting between the Rural and Urban: Estimates from NSSO Data, Economic and Political Weekly, 46 (46). Directorate of Census Operations. Primary Census Abstracts, Census and 2011, Gujarat State, Series-25. Gandhinagar. Directorate of Economic and Statistics Report on Fourth Economic Census, 1998, Gujarat. Gandhinagar: Government of Gujarat. Directorate of Economic and Statistics Report on Fifth Economic Census, 2005, Gujarat. Gandhinagar: Government of Gujarat. Directorate of Economics and Statistics Socio-Economic Review of Gujarat State, Gandhinagar: Government of Gujarat. Dholakia, Ravindra H., Manish B. Pandya and Payal M. Pateriya (2014). Urban-Rural Income Differential in Major States: Contribution of Structural Factors, W.P. No , Indian Institute of Management, Ahmedabad. Kasturi, Kannan (2015). Comparing Census and NSS Data on Employment and Unemployment, Economic and Political Weekly, 50 (22). Mehta, Niti and SP Kashyap (2002). An Approach Towards Identifying Sunrise Industries: A Regional Perspective, Manpower Journal, 38(2&3). Mehta, Niti (2016). Dynamics of Change in the Employment and Enterprise Structure of Gujarat, Working Paper No. 21, Ahmedabad, SPIESR. 12