Employment in informal sector remains below prepandemic level NSO data | Economy & Policy News

After adding 11.7 million workers in the October 2022-September 2023 period from the pandemic lows in April 2021-March 2022, total workers employed in the vast informal sector in India — at 109.6 million — still remains below the pre-pandemic period.

This is according to the latest fact sheet titled ‘Annual Survey of Unincorporated Sector Enterprises (ASUSE)’ released by the National Statistical Office (NSO) on Friday.

According to the previous 73rd round of the National Sample Survey (NSS), conducted between July 2015 and June 2016, around 111.3 million workers were employed by unincorporated enterprises.

However, the number of unincorporated enterprises rose by about 2 million between July 2015-June 2016 and October 2022-September 2023 to 65.04 million.

Unincorporated enterprises refer to business entities that are not legally incorporated as a separate legal entity.

These enterprises typically include small businesses, sole proprietorships, partnerships, and informal sector businesses.

Pronab Sen, chairperson, Standing Committee on Statistics, said the unincorporated sector — which comprises the vast informal sector — was severely hit by the successive economic shocks in the past decade or so. These include demonetisation, goods & services tax (GST) and Covid, which is reflected in the decline in the number of people employed.

“Usually, the number of unincorporated enterprises grows by close to 2 million annually. Had the sector not faced these economic and natural shocks, the total number of such enterprises would have been close to 75 million. In effect, close to 10 million enterprises were lost. Given that an establishment provides employment to around 2.5-3 persons, close to 25-30 million jobs were lost in the process. Also, the number of people employed by them is still lower,” he added. 

However, NSO said: “The results exhibit the resilience shown by the unincorporated sector after the pandemic shock.”

Besides, the fact sheet also showed that the gross value added (GVA) by these establishments rose to Rs 5.42 trillion in the October 2022-September 2023 period from Rs 13.4 trillion in April 2021-March 2022.

In the 2015-16 survey, the GVA by these establishments was Rs 11.52 trillion. 

Besides, the data also showed that the number of establishments in the ‘other services sector’ grew annually by 15.12 per cent, followed by ‘manufacturing establishments’ (2.22 per cent) between April 2021-March 2022 and October 2022-September 2023.

Meanwhile, the maximum annual growth in employment during the period was observed in the ‘other services sector’ (13. 42 per cent) followed by the ‘manufacturing sector’ (6.34 per cent). 

Majority of the workers in the non-agricultural unincorporated sector are in the informal category.

According to the survey, the average annual earnings for informal workers rose to Rs 1.11 lakh in 2022-23 from Rs 1.06 lakh in 2021-22. 

Given the large role and presence of unincorporated enterprises in the Indian economy, NSO developed the idea of ASUSE.

It is for measuring economic and operational characteristics of unincorporated non-agricultural establishments in manufacturing, trade and other services sector (excluding construction). 

Earlier, the NSO used to conduct ASUSE surveys at an interval of five years.

The NSO had proposed the first annual ASUSE survey for the October 2019-March 2020 period and another for April 2020-March 2021.

While the surveys are being conducted annually, the reports have been delayed for some time. The NSO is already in the process of conducting the ASUSE 2023-24 survey.

First Published: Jun 14 2024 | 10:05 PM IST

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