Characteristics of Enterprises More Likely to Face Constraints in the Unorganised Manufacturing Sector in India

Abstract

The unorganised manufacturing sector has been facing numerous challenges in spite of its capacity to generate employment. This study analyses the enterprises in the unorganised manufacturing sector in India most likely to face challenges based on different characteristics. The data for the study is extracted from the 73rd Round of National Sample Survey Organisation (NSSO) for the period 2015–2016. The aim is to identify the characteristics of unorganised manufacturing enterprises more likely to encounter problems. Logistic regression techniques have been employed for this purpose. The results show that the larger enterprises, the establishments, are more likely to face problems than the small own-account units. With odds ratios greater than one, rural sector enterprises, registered enterprises, male-owned enterprises, contracting enterprises, enterprises with accounts maintained and enterprises with government assistance have higher risks of problems. Registration status does not reduce the chances of such enterprises encountering problems. Older enterprises are less likely to face problems. Suitable policy measures designed for enterprises with specific characteristics are needed to address the problems of the unorganised manufacturing sector.