Status of Growth of Informal Manufacturing Enterprises of India and Its Role on the CO₂ Emission Intensity

Abstract

In the Indian economy, informal manufacturing enterprises play a pivotal role within the manufacturing sector, employing a vast workforce and significantly contributing to overall manufacturing output. While the number of these enterprises has risen over time, the exploration of CO₂ emissions from informal manufacturing enterprises is limited, especially in comparison to their formal counterparts. This chapter investigates the relationship between the growth status of informal manufacturing enterprises and their CO₂ emission intensity using the latest four rounds of quinquennial unit-level data from the National Sample Survey Organisation (NSSO). The analysis converts expenditure on electricity and fuel and lubricants into quantities, which are then multiplied by respective emission factors to determine enterprise-level CO₂ emissions. Findings indicate an increase in the percentage share of expanding and other status enterprises from 2000–2001 to 2015–2016, with other status enterprises being the most CO₂ emission-intensive, followed by contracting, expanding and stagnant enterprises. Notably, newer enterprises exhibit lower energy efficiency. Regression analysis further underscores a positive, significant link between growth status and CO₂ emission intensity, attributed to outdated machinery and equipment. Urban enterprises, often engaged in subcontracting activities with formal manufacturing industries, show higher CO₂ emission intensity. Challenges such as power outages significantly contribute to increased CO₂ emissions, highlighting the need for reliable electricity access and a reduction in fossil fuel dependence. This chapter underscores the importance of addressing these issues to align with India's Sustainable Development Goal (SDG) 13 objectives.

Citation

Das, P. and Dandapat, A. (2024), "Status of Growth of Informal Manufacturing Enterprises of India and Its Role on the CO₂ Emission Intensity", Pal, M.K. and Das, P. (Ed.) Informal Manufacturing and Environmental Sustainability, Emerald Publishing Limited, Leeds, pp. 191-205. https://doi.org/10.1108/978-1-83549-998-620241014