More enterprises, more jobs

The number of new businesses floated in India over the last seven years has exceeded the Central Statistical Organisation's projections, leading to a higher intake of people into the workforce.

The government today released the provisional results of the Fifth Economic Census 2005, which showed 42.12 million enterprises existed at the end of last year, with the number of people employed by these at 98.96 million.

The number of enterprises was around 5 per cent more than the number extrapolated at the end of the last economic census in 1998, a CSO official said.

Though the CSO had not extrapolated the employment figure, logically the actual number of people employed at the end of 2005 should also be higher than expected, he added.

The data revealed that the growth in establishment of new enterprises in rural areas outstripped the same in urban areas. Rural areas had 25.8 million enterprises at the end of 2005, up 5.53 per cent over the number in the previous census in 1998.

Urban areas had 16.3 million enterprises at the end of 2005, higher by 3.71 per cent over the previous census figure. The absolute number of people employed in enterprises in rural areas was 50.1 million, higher than the 48.7 million employed in urban enterprises.

Growth in employment between 1998 and 2005 was slower than in enterprises during the same period. This was because of the much larger base figure of employment than the number of enterprises.

Therefore, no meaning could be drawn from the slower growth rate in employment, the CSO official said.

State-wise data on enterprises showed that a shade over 50 per cent of the enterprises were concentrated in five states "" Tamil Nadu, Maharashtra, West Bengal, Andhra Pradesh and Uttar Pradesh. The average employment level per enterprise was 2.35 at the national level.

An interesting trend that emerged in the fifth census was the relatively low level of hired workers in states with the highest number of enterprises, such as Tamil Nadu. Hired workers are those who receive a salary. The remaining workers could be family members of the entrepreneur.