Rural India portrays rosy picture in services sector: Survey

Contrary to the popular and traditional perception that villages
facilitate mainly agricultural activities, rural India also has a
major contribution in the services sector, housing 60 per cent of the
total enterprises in the country, a study has said.

"An estimated 1.65 crore service sector enterprises were in operation
in India during 2006-07. Of these enterprises, 60 per cent (0.99
crore) were in rural India and 40 per cent (0.66 crore) in urban
area," the National Sample Survey Organisation (NSSO) report released
on Friday said.

More than half of the estimated 3.35 crore people working in service
sector enterprises belong to rural India. The services sector is one
of the prime engagers of workforce in the economy.

The report, first in a series of two studies planned to be brought out
based on the survey, reveals that 85 per cent of all enterprises fall
under own account enterprises (OAEs) category that are run without any
hired worker on a fairly regular basis.

The remaining 15 per cent were found to be under Establishments --
those running with at least one hired worker on a fairly regular
basis.

Transport, storage and communications engage 25 per cent of the
workers, followed by financial intermediation engaging 17 per cent
workers and hotels and restaurants 15 per cent, the findings revealed.

The service sector enterprises in the survey include all service
sector enterprises (excluding trade), other than government and public
sector undertakings and those covered under annual survey of
industries.

The services covered were hotels and restaurants, storage and
warehousing, transport and communication, financial intermediation,
real estate, renting and other business activities, education, health
and social work, among others.

About 90 per cent of enterprises were propriety enterprises and 7 per
cent were cooperative societies and self help groups. About 59 per
cent enterprises were not registered with any agency.

Further, 74 per cent enterprises had fixed premises of operation and
32 per cent were located within household premises.

The NSSO revealed that 86 per cent of all enterprises did not receive
any assistance from any government or non-government agencies while
loan was the most dominant form of assistance in case of 14 per cent
of enterprises receiving assistance.

Major problems faced by 57 per cent enterprises were "competition from
larger units" and "shortage of capital". As far as work was concerned,
two per cent enterprises had undertaken at least some work on contract
basis, while another 32 per cent had undertaken some economic
activity.

"About 81 per cent of working owners or managing partners of
proprietary and partnership enterprises were literate, with some
formal education," the report said, adding even in rural areas,
literacy with some formal education was as high as 77 per cent.

The survey was conducted on 1,90,282 sample enterprises, of which 438
enterprises belonged to list frame and 1,89,844 belonged to sample
villages/urban blocks of area frame.

Financial sector enterprises and other service sector enterprises
comprising relatively large units were put under "list frame" while
the remaining units within the coverage were categorised in "area
frame".

The field work of the survey was carried out during July 2006 to June
2007.

The survey excluded Leh (Ladakh), Kargil, Poonch and Rajauri districts
of Jammu & Kashmir, interior villages of Nagaland and inaccessible
villages of Andaman and Nicobar islands.