Private enterprise in south Indian states across social groups: an analysis of ownership and productivity and their policy implications

This collaborative study of Indian Institute of Dalit Studies and Confederation of Indian Industries in five southern states, namely Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana is an attempt to understand the ownership of SC/STs in enterprises by their size, location, regional spread, industry group, seasonality, along with issues of capital and productivity. This study is based on the data from economic census and national sample survey. The result shows that Private enterprises are largely proprietary enterprises, i.e. owned by a single person. As regard to the rural-urban location of enterprises, a highest 74 per cent are located in rural areas in Andhra Pradesh. The corresponding share of rural areas in total enterprises is 59.4 per cent in Karnataka, 56 per cent in Telangana and about 54 per cent each in Kerala and Tamil Nadu.  Such underrepresentation of SCs and STs in enterprise ownership is a widespread phenomenon at district level also. The presence of SC owned enterprises is comparatively high in industry groups such as livestock, construction and transport. Overdependence on self-finances is an issue which shows the lack of other sources of finances. The assistance received by private unincorporated enterprises in the form of loans, subsidies and skill development from various government programmes is miniscule both in industry and service-oriented enterprises. Falling demand is noted as one of the major problems faced by all enterprises in most of the states. Low per worker fixed capital is significantly low in SC owned enterprise is also worrisome. Apart from general measures for improving the enterprise development and productivity levels both for SCs/STs and ‘others’, special measures are required in the form of mentorship, access to cheaper finance from banks, technology, special preferences in the sales of output/services and skill training for SC/ST entrepreneurs on a continuous basis. The issues related to discrimination in enterprise development also are found to have significant adverse impact on the private enterprise development among SCs/STs. This needs to be understood and addressed accordingly through more effective affirmative measures both by public and private sectors.