This paper, hence, establishes the state‐of‐the‐art approaches in this field and proposes potential improvements in achieving representativeness of the data. Using the Ukrainian illegal self‐employed construction workers as an example, this paper evaluates the choices made by the researchers.
International Journal of Management (IJM) Volume 7, Issue 1, Jan-Feb 2016, pp 61-68, Article ID: IJM_07_01_006 Available online at http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=1 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication ECONOMIC PROBLEMS OF INFORMAL (UNORGANIZED) SECTOR PROFESSIONALS IN NAGPUR DISTRICT Prof Anantkumar D Gadre M.Com, M Phil., Net, B.Ed., M.ed, Assistant Professor, Suwalal Patni’s Art & Commerce College, Pulgaon, Wardha, Maharashtra Dr Rajiv M Jadhao M.Com, M Phil., Ph.D, Associate Professor and Head, Department of Commerce, Lok Mahavidyalaya, Wardha, Maharashtra Cite this Article: Prof Anantkumar D Gadre and Dr Rajiv M Jadhao Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District International Journal of Management, 7(1), 2016, pp 61-68 http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=1 INTRODUCTION Indian retail is dominated by a large number of small retailers consisting of the local kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops, paan and beedi (local betel leaf and tobacco) shops, hand-cart hawkers, pavement vendors, etc which together make up the so-called "unorganized retail" or traditional retail The last few years have witnessed the entry of a number of organized retailers opening stores in various modern formats in metros and other important cities Unorganized retailers normally not pay taxes and most of them are not even registered for sales tax, VAT, or income tax (Zia and Azam, 2013) Retailing in India is predominantly unorganized According to a survey by AT Kearney, an overwhelming proportion of the Rs 400,000 crore retail markets are unorganized in India In fact, only a Rs 20,000 crore segment of the market is organized The sector is highly fragmented with 97% of its business being run by the unorganized retailers like the traditional family run stores and corner stores The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10% of India’s GDP Indian retail is dominated by a large number of unorganized retailers consisting of the local kirana stores, chemists, footwear shops, apparel shops, paan and beedi shops, hand-cart hawkers, pavement vendors, etc Retailing in unorganized sector is thus not a profit oriented vocation but a mere source of livelihood Naturally, the capital investment is very low http://www.iaeme.com/IJM/index.asp 61 editor@iaeme.com Prof Anantkumar D Gadre and Dr Rajiv M Jadhao and the infrastructure is rudimentary It is estimated that less than 4% of Indian retailers have shops larger than 500 square feet There has been considerable growth in organized retailing business in recent years Concerns have been raised that the growth of organized retailing may have an adverse impact on retailers in the unorganized sector (Thenmozhi and Dhanaoal, 2011) National Commission for Enterprise in the Unorganized Sector (2007) reported that out of total nonagricultural unorganized workers 63 percent workers are selfemployed Only about 0.4 per cent of the unorganized sector workers were receiving social security benefits like Provident Fund, and this proportion had not changed since 1999-2000.(NCEUS, 2007) This indicates the unawareness of unorganized sector professionals towards government schemes Employees of enterprises belonging to the unorganized sector have lower job security and poorer chances of growth, and no leaves and paid holidays, they have lower protection against employers indulging in unfair or illegal practices (Gupta, 2009) In the light of above information this paper tries to investigate economic status of unorganized sector professionals in Nagpur District, by considering below objectives: OBJECTIVES To know monthly personal and family income of unorganized professionals To study the savings strategies of unorganized professionals To know the information regarding loans taken by unorganized professionals To know information regarding sources of loan taken by unorganized professionals To study the economic problems of unorganized professionals REVIEW OF LITERATURE Nandal (2006) reported that a vast majority of India's labour force is in unorganized sector In the absence of economic opportunities in their own states, many workers migrate across the other states of India to seek employment Construction industry depends almost entirely on migrant workers, majority of which are women The main object of this paper is to shed light on the socio‐economic problems being faced by a section of the women workers in construction industry These women workers have a very tough life In spite of being actively involved in economic activities for survival, bearing and rearing of children remain their prime responsibility, and thus they end up with playing roles in both production and reproduction According to Sengupta (2008) emergence of modern retail in India is not just a result of increasing consumer buying power – manufacturers and unorganized retailers also have an important role to play in this process at the macro‐level At the micro‐level, the trigger came from diverse angles like entrepreneurial desire to provide better service to consumers, social desire to provide relief to the masses in the form of lower prices, desire to capitalize on emerging business opportunities being provided by the changing business environment, etc Fajana (2008) addressed the issue of unionization of the largely non‐unionized informal economic activities as a strategy for achieving decent work and pay as well as promoting national development in Nigeria It was found that decent work and pay, which would assist poverty minimization and thus national development, would be furthered by unionization of the informal sector At the same time, there are many barriers faced by unions in seeking to organize in the latter area http://www.iaeme.com/IJM/index.asp 62 editor@iaeme.com Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District Agarwala (2009) provide an internationally comparative measure of India's informal workforce, illustrate informal workers’ social conditions relative to those of formal workers, highlight the expansion of the informal workforce since the government enacted liberalization reforms, and expose the unique political action strategies Indian informal workers are launching against the state Sagheer et al., (2009) has attempted to create a common ground where the two theories of Value Chain Analysis and competitiveness are able to meet An empirical validation of the framework can encourage more future research on this topic This paper can also be used by researchers as a reference point for studies on Indian agrifood sector The proposed framework can be used as an analytical tool by researchers to study similar industries from developing economies like textiles, leather, etc that are unorganized Vershinina and Rodionova (2011) discussed the issues in studying hidden populations, with particular focus on methodology used to investigate ethnic minority entrepreneurs who illegally run their businesses in the UK In this paper, on reflection, the authors look at what issues should be considered before engaging with such communities, as we identify current approaches and evaluate their merits The authors analyze the ethical considerations, problems and issues with access to such data, discuss early and more recent sampling methodologies and the ways to estimate the size of hidden population This paper, hence, establishes the state‐of‐the‐art approaches in this field and proposes potential improvements in achieving representativeness of the data Using the Ukrainian illegal self‐employed construction workers as an example, this paper evaluates the choices made by the researchers D’souza (2013) discussed on role of entrepreneur and Challenges before the present youth in taking up such job in unorganized sectors as self- employment It highlight about present scenario of unorganized sector, Status, role of entrepreneur in creating interest for self-employment, Challenges and problems faced in selecting self- employment Kahre (2014) pointed out that the Indian consumers’ prefer small retailers due to assortment, service, store facility and relationship The older and younger populations differ in their reasons for preferring small retail stores Author observed that service and assortment influence consumer-small retailer relationships Joshi (2015) found that although there are studies which try to point out measurability problems of services in developed European economies, however, studies related to service sector statistics problems in India are far less in number The study mainly focus on the service sector statistics problems in India and point out the way forward It is evident from the above literature that studies were carried out on unorganized sector but these were limited only up to labour force No study was observed to conduct on the economic status of professionals doing small businesses in unorganized sector Hence the study is important to find out the actual economic condition of unorganized sector professionals METHODOLOGY By considering the aim and objectives of the study, a sample survey was conducted in Nagpur district For the study purpose total 500 unorganized sector professionals doing different small businesses (hawkers, Peddlers and street vendors etc.) were http://www.iaeme.com/IJM/index.asp 63 editor@iaeme.com Prof Anantkumar D Gadre and Dr Rajiv M Jadhao selected from all 14 tehsils of Nagpur district The data was collected through selfprepared interview schedule DATA ANALYSIS Descriptive analysis was used to analyze the primary data obtained from the 500 individual samples The frequency and percentage method was used to generate results from data obtained from unorganized sector professionals The frequency of answer was shown by providing a frequency table for responses to each of the relevant questions in the questionnaire It is observed that monthly income from business of 44.8% unorganized sector professionals is between Rs 2000 and Rs 50000 (Table 1), whereas only 9.6% professionals earned more than Rs 9000 from their business The monthly family income of 35.8% professionals is between Rs 50001 and 10000 followed by less than Rs 5000 (34%) (Table.2) Furthermore 54.4% unorganized sector professional have taken loan for business (Table 3) out of which 74.6% and 40.4% professionals have taken loan from bank and their relatives however 36% professional taken loan from money lenders (Table 4) 77.6% unorganized sector professionals make return payment of loan taken by them on monthly basis (Table 5) Unorganized sector professionals reported various problems while taking loan out of which 48.5% respondents have to take loan from money lenders on high interest rate in case of urgency, 44.1% respondents suffered from avoidance of the bank employees for approving their loan, 22.8% respondents were unable to fill the loan form, whereas 19.9% respondents have to visit banks frequently for approving their loan as well as12.1% respondents have to give bribe for approving their loan (Table 6) It is observed that 72.8% respondents make regular savings at multiple sources (Table 7), out of which 42.9% respondents make their savings at credit institutions while only 4.1% respondents make their savings at private sector banks (Table 8) 66.4% respondents made financial planning in a view of business development (Table 9) Out of which 49.1% respondents made financial planning by making regular savings followed by 48.8% respondents who use insurance for financial planning (Table 10) Respondents faced various problems while making financial adjustment in business, 66% respondents faced problem of buying low quality goods whereas 48.9% respondents faced problem such as lack of capital due to unstable price of goods (Table 11) They also faced different problems while raising capital for business, 51.5% respondents faced problem of inadequate capital due to rise in inflation, whereas 46.8% respondent faced problem of lack of financial help on time (Table 12) Daily needs of 66.8% respondents were fulfilled from the income they received from their business CONCLUSION Unorganized sector business systems have important contribution in Indian economy In a view to carry the goods from factory to consumer and by generating employment, unorganized sector business system provides its important contribution to Indian economy The informal sector plays a significant role in the economy in terms of employment opportunities and poverty alleviation This sector generates incomeearning opportunities for a large number of people In India, a large section of the http://www.iaeme.com/IJM/index.asp 64 editor@iaeme.com Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District total workforce is still in the informal sector, which contributes a sizeable portion of the country's net domestic product The unorganized sector has a crucial role in our economy in terms of employment and its contribution to the National Domestic Product, savings and capital formation The conclusions were drawn on the basis of study results obtained after analysis of data collected from unorganized sector professionals, which are as follows1 10 11 12 13 14 15 16 Majority of unorganized sector professionals in Nagpur District personally earned Rs 2000 to Rs 5000 per month from their business The monthly family income of majority of unorganized sector professionals in Nagpur District is between Rs 5000 and Rs 10000 Majority of unorganized sector professionals in Nagpur District have taken loan for their business Majority of unorganized sector professionals in Nagpur District have taken loan from bank Majority of unorganized sector professionals in Nagpur District pay installment against their loan on monthly basis Majority of unorganized sector professionals in Nagpur District faced problems while arranging loan Majority of unorganized sector professionals in Nagpur District faced problems such as unable to fill up the loan form, corruption at bank, frequently visiting to bank for loan approval, taking loan from money lenders on high interest rate at the time of financial problem and non-cordial behaviour of bank employees However majority of professional face problem of taking loan from money lenders on high interest rates Majority of unorganized sector professionals in Nagpur District make savings on regular basis Majority of unorganized sector professionals in Nagpur District made savings in credit institutions Majority of unorganized sector professionals in Nagpur District planned their savings in view of development of business Majority of unorganized sector professionals in Nagpur District planned their finance by performing regular savings and insurance Majority of unorganized sector professionals in Nagpur District faced problem while making daily financial adjustment for business Majority of unorganized sector professionals in Nagpur District problem of purchasing goods if their business was not going well Majority of unorganized sector professionals in Nagpur District faced problem while raising capital for their business Majority of unorganized sector professionals in Nagpur District faced problem of inadequate capital due to rise in inflation while raising capital Daily needs of majority of unorganized sector professionals in Nagpur District are fulfilled from their income RESEARCH IMPLICATIONS Government should provide social security to unorganized sector professionals under these scheme facilities such as pension, health services, educational opportunity of children and low cost houses etc should be provided to them A special bank should be created under municipality or Municipal Corporation to provide easy loan services to unorganized sector professionals http://www.iaeme.com/IJM/index.asp 65 editor@iaeme.com Prof Anantkumar D Gadre and Dr Rajiv M Jadhao ANNEXURE Table Monthly professional income of unorganised sector professional Monthly Income from Profession Less than Rs 2000 Rs 2000 to 5000 Rs 5001 to 9000 More Than Rs 9000 Total Frequency 47 224 181 48 500 Percentage 9.4 44.8 36.2 9.6 100 Table Monthly family income of unorganised sector professional Monthly Family Income Less than Rs 5000 Rs 5001 to 10000 Rs 10001 to 15000 More Than Rs 15000 Total Frequency 170 179 106 45 500 Percentage 34 35.8 21.2 100 Table Responses about taking loan for business Response Yes No Total Frequency 272 228 500 Percentage 54.4 45.6 100 Table Source of loan taken for business Source of loan Bank Private Sector (Money Lender) Relatives Frequency 203 98 110 Percentage 74.6 36.0 40.4 Table Mode of loan Payment Mode of loan payment Fortnightly Monthly Quarterly Other Total Frequency 10 211 10 41 500 Percentage 3.7 77.6 3.7 15.1 100 Table Type of problems faced while applying for loan Type of Problems Unable to fill-up loan form Giving bribe for approving loan Frequent visit to bank for approving loan Taking loan from money lenders on high interest rates at the time of urgency Avoidance of bank employees for approving loan http://www.iaeme.com/IJM/index.asp 66 Frequency 62 33 54 Percentage 22.8 12.1 19.9 132 48.5 120 44.1 editor@iaeme.com Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District Table Responses about regular savings Response Yes No Total Frequency 364 136 500 Percentage 72.8 27.2 100 Table Place where savings are made by respondents Place of Savings Government Bank Private Bank Credit Institutions Saving Groups Others Frequency 91 15 156 54 70 Percentage 25 4.1 42.9 14.8 19.3 Table Financial Planning in a view of business development Response Yes No Total Frequency 332 168 500 Percentage 66.4 33.6 100 Table 10 Nature of financial planning Nature of Financial Planning By regular savings Fixed Deposit Insurance Others Frequency 163 33 162 Percentage 49.1 9.9 48.8 0.6 Table 11 Problems faced while making financial adjustment in business Problems Lack of capital due to unstable rate of goods Buying low quality goods Difficulty while purchasing goods due to poor business Yes No Total N % N % 177 48.9 185 51.1 362 239 66.0 123 33.9 362 64 17.7 298 82.3 362 N= Frequency; %= Percentage Table 12 Problem faced while raising capital for business Problems Inadequate capital due to rise in inflation Lack of financial help on time Taking loan from private sector on higher interest rate Mortgaging precious object Yes N % 188 51.5 171 46.8 71 19.5 68 18.6 No N 177 194 294 297 % 48.5 53.2 80.5 81.4 Total 365 365 365 365 N= Frequency; %= Percentage http://www.iaeme.com/IJM/index.asp 67 editor@iaeme.com Prof Anantkumar D Gadre and Dr Rajiv M Jadhao Table 13 Fulfilment of daily needs of family of unorganized sector professionals from their professional income Response Yes No Total Frequency 334 166 500 Percentage 66.8 33.2 100 REFERENCES [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] Agarwala, R (2009) An economic sociology of informal work: the case of India, in Nina Bandelj (ed.)Economic Sociology of Work (Research in the Sociology of Work, Volume 18) Emerald Group Publishing Limited, pp.315 – 342 D’souza, A.P (2013) Unorganized Sectors: Role of an Entrepreneur and Challenges in Self- Employment, International Journal of Scientific and Research Publications, 3(6): 1-5 Fajana, S (2008) The Nigerian informal economy: Instigating decent work and pay, and national development through unionisation, Employee Relations, 30(4):372 – 390 Joshi, S (2015) "Service sector statistics in India: problems and way forward, World Journal of Science, Technology and Sustainable Development,12(2):.148 – 154 Khare A (2014) Consumer-small retailer relationships in Indian retail, Facilities, 32(9/10):533 – 553 Kulwant Rai Gupta (1 January 2009), Economics of Development and Planning Atlantic Publishers & Dist P 746 Nandal, S (2006) Women workers in unorganized sector: A study on construction industry in Haryana, International Journal of Development Issues, 5(2):119 – 132 Report on condition of work and promotion of livelihood in the unorganised sector, National Commission for enterprises in the Unorganised Sector, August 2007 Sagheer, S., Yadav, S.S and Deshmukh, S.G (2009) Developing a conceptual framework for assessing competitiveness of India's agrifood chain, International Journal of Emerging Markets, 4(2):137 – 159 Sengupta, A (2008) Emergence of modern Indian retail: an historical perspective, International Journal of Retail & Distribution Management, 36(9):689 – 700 Dr Prafulla W Sudame and Prof Prashant K Kshirsagar Relationship between Educational Level of Investors in Vidarbha Region of Maharashtra State of India and Their Ulip Related Practices International Journal of Management, 5(9), 2014, pp 70-82 Thenmozhi S.P and Dhanapal, D (2011) Unorganised Retailing in India – A Study on Retail Service Quality, European Journal of Social Sciences;23(1): Vershinina, N and Rodionova, Y (2011) Methodological issues in studying hidden populations operating in informal economy, International Journal of Sociology and Social Policy, 31(11/12):697 - 716 Zia, A and Azam, K.M (2013) Unorganized Retail Shopping Experience in India: An Empirical Investigation, Pacific Business Review International, 5(7):716 http://www.iaeme.com/IJM/index.asp 68 editor@iaeme.com ... professionals in Nagpur District made savings in credit institutions Majority of unorganized sector professionals in Nagpur District planned their savings in view of development of business Majority of. .. http://www.iaeme.com/IJM/index.asp 62 editor@iaeme.com Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District Agarwala (2009) provide an internationally comparative measure of India's informal. .. large number of people In India, a large section of the http://www.iaeme.com/IJM/index.asp 64 editor@iaeme.com Economic Problems of Informal (Unorganized) Sector Professionals in Nagpur District