The Annual Survey of Unincorporated Enterprises (ASUSE) provides a detailed analysis of the unorganised or informal sector in India. This sector encompasses a variety of unincorporated enterprises, including Micro, Small, and Medium Enterprises (MSMEs), household units, and own-account enterprises.

Survey Scope and Coverage

• Unincorporated Enterprises: Includes those not covered under formal regulatory frameworks, such as:
• Manufacturing Units: Not covered by the Factories Act, 1948 or the Annual Survey of Industries (ASI).
• Trade and Services: Proprietary and partnership establishments (excluding LLPs), societies, trusts, associations, clubs, co-operatives, self-help groups, and non-profit institutions.
• Sectors Covered:
• Manufacturing
• Trade
• Other Services

Headline Trends (2022-23 vs 2015-16)

• Employment Trends:
• Decrease in Employment: The informal sector experienced a decrease in employment, with the number of workers dropping by 16.45 lakh (1.5%), from 11.13 crore in 2015-16 to 10.96 crore in 2022-23.
• Urban vs. Rural Workers:
• Urban: 5.72 crore
• Rural: 5.24 crore
• Number of Enterprises:
• Increase in Enterprises: The total number of unincorporated enterprises increased by 16.56 lakh, reaching 6.50 crore in 2022-23 compared to 6.33 crore in 2015-16.
• Types of Enterprises:
• Own-Account Enterprises: Increased by nearly 4% over the seven-year period.
• Hired-Worker Enterprises: Contracted by 3.2%.
• Quality of Employment:
• Shift to Self-Owned Units: There has been a notable shift from hired-worker units to self-owned units, such as household or one-person enterprises. This indicates a deterioration in the quality of employment, as hired-worker units, typically more labor-intensive, are decreasing.
• Impact on Manufacturing:
• Labour-Intensive Manufacturing: The decline in employment in the unorganised sector is attributed to a shift towards more capital-intensive manufacturing processes. This shift has negatively impacted labor-intensive manufacturing jobs within the informal sector.

Implications

• Economic Role: The informal sector continues to play a significant role in India's economy, contributing to employment, GDP, and the socio-economic landscape.
• Support to Incorporated Sector: This sector also supports the incorporated sector by supplying goods and services, forming a crucial part of the domestic value chain.

The data reflects both growth and challenges within the informal sector. While the number of enterprises has increased, the shift from hired-worker enterprises to self-account units signifies a change in the nature of employment, potentially impacting overall economic quality and growth. The findings underscore the need for policies that support employment quality and address the evolving dynamics of the informal sector.

Sectoral Trends and Economic Indicators

Sectoral Trends (2022-23 vs 2015-16)

• Manufacturing Sector:
• Decline in Units: The number of manufacturing units contracted by 9.3%, falling to 1.78 crore.
• Decline in Employment: The number of workers in manufacturing decreased by 15%, reaching 3.06 crore.
• Trade Sector:
• Decline in Units: Units in the trade sector saw a smaller contraction of 2%, decreasing to 2.26 crore.
• Employment Increase: The number of workers in the trade sector increased marginally by 0.8%, reaching 3.90 crore.
• Services Sector:
• Increase in Units: Establishments in the services sector grew by 19.1%, reaching 2.46 crore.
• Employment Increase: The number of workers in the services sector rose by 9.5%, approaching 4 crore.

Output Data

• Gross Value Added (GVA):
• Per Enterprise: Increased to Rs 2.38 lakh in 2022-23 from Rs 1.82 lakh in 2015-16.
• Per Worker: Rose to Rs 1.42 lakh from Rs 1.04 lakh.
• Real Terms:
• The real GVA growth was slower, with an increase of 6.9% in 2022-23 compared to pre-pandemic levels. This slower growth indicates ongoing challenges in the sector.

Informal Employment Across States

• General Trends:
• Decline in Workers: Sixteen out of 34 states/UTs recorded a decline in informal sector workers from 2015-16 to 2022-23.
• Pandemic Impact: The share of informal sector workers increased in many states immediately after the pandemic, reflecting economic distress and a shift from the formal sector.
• Regional Highlights:
• High Share in Uttar Pradesh, West Bengal, and Maharashtra: These states had the highest share of informal sector enterprises in both rural and urban areas.
• Women Owners and Workers:
• Southern States: Relatively high share of women owners and workers in the informal sector.
• Eastern States: Higher share of women in the sector compared to other regions.
• Western, Northern, and Central States: Lower share of women in the sector.

Analysis and Implications

• Manufacturing Sector: The significant decline in both units and employment highlights challenges in this sector, possibly due to shifts towards more capital-intensive processes and less labor-intensive activities.
• Trade Sector: The minor decline in units coupled with a slight increase in employment suggests relative stability compared to manufacturing, but with potential for growth in employment.
• Services Sector: The growth in both units and employment points to a robust expansion, possibly driven by increasing demand for services and adaptation to changing economic conditions.
• Economic Indicators: Despite nominal growth in GVA, the slower real growth indicates that the sector is still facing post-pandemic recovery challenges.
• Regional Employment Dynamics: The varying impact on informal employment across states, with notable declines in some and shifts towards informal work in others, reflects broader regional economic disparities and the impact of the pandemic.
• Gender Dynamics: The higher share of women in certain states underscores regional variations in gender participation in the informal sector, which could inform targeted policy interventions.

Why in the News?

The 24th summit of the Council of Heads of State of the Shanghai Cooperation Organization (SCO) took place in Astana, Kazakhstan, and was notable for several key reasons:

• It adopted the Astana Declaration.
• It was the first SCO summit to be attended by the UN Secretary-General.
• Significant initiatives and agreements were announced.

Key Highlights of the Summit

• Theme: The summit was titled "Strengthening Multilateral Dialogue—Striving Towards a Sustainable Peace and Prosperity," emphasizing the SCO's focus on collaborative and multilateral approaches to regional and global issues.
• Astana Declaration: The declaration reflects the SCO’s commitment to strengthening multilateral cooperation and addressing common challenges.
• Program of Cooperation:
• Counter-Terrorism, Separatism, and Extremism (2025-2027): A new program aimed at addressing these critical security threats, reinforcing the SCO’s role in regional stability.
• SCO Anti-Drug Strategy (2024-2029): This strategy aims to combat drug trafficking and related issues, highlighting the organization's ongoing efforts to address illicit drug activities.
• Initiative on World Unity for Just Peace and Harmony: Proposed by Kazakhstan, this initiative focuses on fostering global unity and peaceful coexistence.
• Membership Expansion: Belarus officially became the 10th member of the SCO. This expansion reflects the organization’s growing influence and its appeal to new member states.

SCO: Role in Reshaping the Global Multilateral Order

The Shanghai Cooperation Organization (SCO) has been increasingly pivotal in reshaping global multilateralism by expanding its influence and challenging existing western-dominated structures. Here’s an overview of the SCO’s role and its impact on the global multilateral order:

Global Pivot of the SCO

• Expanding Geographic and Geopolitical Reach: The SCO’s membership, which now includes significant global players like China, Russia, India, and Pakistan, covers approximately 23% of the world’s economic output and 42% of the global population. This expansion helps Moscow and Beijing in advancing their geopolitical interests.
• Strategic Significance: The SCO's reach extends beyond Central Asia, providing a strategic platform for its members to influence global geopolitics and economic dynamics.

Challenging Western Structures

• Alternative Multilateralism: The SCO is positioning itself as an alternative to existing western-led institutions. By integrating countries such as Turkey, a NATO member and SCO dialogue partner, the SCO is attempting to offer a counter-narrative to Western-led multilateral frameworks.
• Geopolitical Realignment: The SCO’s expansion reflects a broader trend of realigning global power structures, challenging the dominance of Western-centric institutions and offering new avenues for international cooperation.

Filling the Security Void

• Addressing Afghanistan's Security Vacuum: Following the NATO withdrawal from Afghanistan in 2021, the SCO has stepped in to address the security vacuum. The Afghanistan Contact Group (ACG), established by the SCO in 2005, works to maintain regional cooperation and stability in Afghanistan, reflecting the SCO’s role in regional security.
• Regional Stability: The SCO’s involvement in Afghanistan highlights its commitment to addressing regional security issues and filling gaps left by other international actors.

Counter-Terrorism Efforts

• Regional Anti-Terrorist Structure (RATS): The SCO has established the RATS to coordinate counter-terrorism efforts among member states. This structure is crucial for managing and mitigating terrorist threats within the SCO's vast and diverse region.
• Collective Security: RATS represents the SCO’s approach to collective security and regional cooperation in combating terrorism and related threats.

Fulfilling China’s Strategic Design

• China’s Leadership: China uses the SCO to showcase its leadership and offer alternatives to Western-dominated institutions. By leveraging the SCO, China positions itself as a champion of the Global South, advocating for the interests of developing countries.
• Countering Western Narratives: The SCO serves as a platform for Russia and China to present counter-narratives to Western policies and institutions, thus providing a broader spectrum of international governance.

Central Asia’s Connectivity Catalyst

• Infrastructure and Connectivity Projects: The SCO plays a significant role in enhancing connectivity and developing infrastructure in Central Asia, a historically isolated region. Key projects include:
• International North-South Transport Corridor (INSTC): A major initiative aimed at improving trade routes and transportation between India, Iran, and Russia, enhancing regional connectivity.
• Chabahar Project: A strategic port development project in Iran, aimed at facilitating trade and connectivity between Central Asia and the rest of the world.

Shanghai Cooperation Organisation (SCO)

Origins and Establishment

• Origins: The Shanghai Cooperation Organisation (SCO) originated from the "Shanghai Five," a group formed in 1996, consisting of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. This group was established to address security concerns related to extremist religious groups and ethnic tensions that emerged following the dissolution of the Soviet Union in 1991.
• Establishment: The SCO was formally established on June 15, 2001, in Shanghai, with the addition of Uzbekistan as a sixth member. The organization's membership has since expanded, and it now includes nine member countries: India, Iran, Kazakhstan, China, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan. Afghanistan and Mongolia hold Observer Status.

Significance of the SCO

• Regional Security Focus: The SCO primarily addresses security issues in Asia and serves as a platform for member states to collaborate on various regional challenges. It is one of the few international organizations with a focus on security issues and consists predominantly of Asian members.
• Counterbalance to Western Influence: Russia and China view the SCO as a counterbalance to the Western-dominated international order. The organization, alongside other groupings like BRICS, seeks to challenge US influence and promote a multipolar world order.
• Economic and Demographic Impact: The SCO represents about 40% of the world's population and member countries collectively contribute over USD 23 trillion to global GDP. This economic and demographic weight makes the SCO a significant player in global affairs.

Relevance of the SCO for India

• Regional Cooperation: For India, SCO membership is an opportunity to strengthen ties with Central Asian countries and improve relations with key regional actors. It facilitates communication and cooperation on common security issues, enhancing India’s strategic engagement in the region.
• Counter-Terrorism: The SCO’s Regional Anti-Terrorist Structure (RATS) is crucial for India. RATS assists member countries with counter-terrorism exercises, intelligence sharing, and information on terrorist movements and drug trafficking. This collaboration supports India's efforts to combat terrorism and enhance regional security.

Challenges for India

• Balancing Ties with China and Russia: As an SCO member, India must navigate its complex relationships with China and Russia. The organization’s dynamics often involve balancing India's strategic interests with those of other major members, particularly in areas where India and China have competing interests.
• Managing Relations with Pakistan: The presence of Pakistan in the SCO poses challenges for India. The organization’s structure requires India to engage with Pakistan on regional issues, despite ongoing bilateral tensions.
• Economic and Strategic Interests: India needs to ensure that its participation in the SCO translates into tangible economic benefits. Additionally, maintaining strategic autonomy within the organization while participating in initiatives like the Belt and Road Initiative (BRI) presents a challenge, given India’s concerns over sovereignty and regional influence.
• Increased Bilateral Trade: While the SCO offers opportunities for increasing trade with Central Asian countries, India must work to enhance its economic ties and ensure that its trade interests are effectively represented within the organization.

Shanghai Cooperation Organisation (SCO): Challenges and India’s Role

Challenges Facing the SCO

• Afghanistan Policy Fracture:
• Issue: SCO members are increasingly engaging with the Taliban for individual national interests, which risks undermining the collective approach of the SCO in addressing Afghanistan's challenges. This fragmented approach could dilute the effectiveness of the SCO’s collective strategy on Afghanistan.
• India’s Position: India supports an “Afghan-led, Afghan-owned, and Afghan-controlled” process for peace and reconciliation. The fragmented engagement by SCO members contrasts with this doctrine, posing a challenge for India’s alignment within the organization.
• China’s Multilateral Power Play:
• Issue: China aims to use the SCO as a platform to advance its regional geoeconomic and strategic interests, potentially transforming the organization into a China-led multilateral forum.
• Example: Efforts to promote the Belt and Road Initiative (BRI) within the SCO framework could enhance China’s regional influence at the expense of other members' interests.
• Identity Crisis:
• Issue: The SCO faces criticism for lacking executive authority and being perceived as a forum for discussion rather than effective decision-making. This has led to comparisons with the Non-Aligned Movement (NAM), which is seen as a platform for mere announcements without substantial outcomes.
• Diverse Interests:
• Issue: The diverse interests of member states make consensus-building challenging. For instance, India's declaration of Pakistan as the “epicenter of terrorism” contrasts with the SCO’s broader approach, complicating unified positions on key issues.

India’s Role and Priorities within the SCO

• Membership and Engagement:
• Observer Status: India was granted observer status in 2005.
• Full Membership: India became a full member in 2017.
• Recent Developments: In the 2024 SCO summit, India’s External Affairs Minister met with his Chinese counterpart to emphasize the importance of mutual respect, sensitivity, and interests in the India-China relationship.
• Balancing Act:
• Summit Participation: India’s Prime Minister did not attend the 24th SCO summit in Astana. India also hosted the SCO meeting virtually in 2023 under its first-ever SCO presidency, reflecting a strategic approach to participation.
• Development Focus: India aims to shift the SCO’s focus toward development rather than an anti-Western agenda. This involves balancing China’s influence and promoting a more inclusive and development-oriented agenda.
• Strategic Priorities:
• Infrastructure: India uses the SCO platform to improve relations with Central Asian Republics (CARs) and counterbalance Chinese dominance in regional connectivity projects.
• Counter-Terrorism: A major priority for India is addressing terrorism and extremist groups, particularly concerning its northwest border. The SCO’s Regional Anti-Terrorist Structure (RATS) supports this objective.
• Incorporation of Indian Themes: India’s priorities, such as themes from the G20 like “One Earth, One Family, One Future,” the startup forum, and the Life for the Environment (LiFE) initiative, have been incorporated into SCO declarations.
• SECURE Vision:
• India’s Vision: India’s engagement with the SCO is guided by the SECURE framework, which stands for:
• Security: Ensuring regional security and counter-terrorism.
• Economic Cooperation: Promoting economic development and trade.
• Connectivity: Enhancing regional infrastructure and connectivity.
• Unity: Fostering unity among member states.
• Respect for Sovereignty and Territorial Integrity: Upholding national sovereignty and territorial integrity.
• Environmental Protection: Addressing environmental challenges and promoting sustainability.

Conclusion

To remain relevant and effective, the SCO must navigate several key challenges:

• Balancing Expansion with Focus: The organization needs to balance its expansion with a focus on regional issues and collective approaches to challenges like Afghanistan.
• Fostering Consensus: Strengthening mechanisms for consensus-building is crucial for addressing the diverse interests of member states.
• Moderating China’s Dominance: The SCO must manage China’s influence to prevent the organization from becoming a mere platform for Chinese strategic interests.

India’s role in the SCO is characterized by a balancing act between advancing its priorities and navigating the complex dynamics within the organization. The SCO’s future effectiveness will depend on its ability to address these challenges while aligning with its members' shared goals and interests.

1. Overview of Recent Developments

• Increase in Patents: India has seen a significant rise in the number of patents granted over the past decade. From March 2023 to March 2024, over one lakh patents were granted, with an average of 250 patents granted every working day.
• Patent Application Frequency: Every 6 minutes, a technology seeks intellectual property protection in India.

2. Understanding Patents

• Definition: A patent is a form of intellectual property that grants the owner exclusive rights to make, use, or sell an invention for a limited period (20 years from the filing date in India) in exchange for full disclosure of the invention.
• Patent Criteria: To be patented, an invention must be new, involve an inventive step, and be capable of industrial application.
• Governing Law: The patent system in India is governed by the Patents Act, 1970, with regular updates to the Patent Rules to adapt to evolving needs.

3. Jurisdiction and Scope

• Territorial Nature: Patents are territorial rights. A patent granted by the Indian government is effective only within India. To protect an invention in other countries, separate patents must be obtained in those jurisdictions.

4. Significance of Patents

• Encouragement of Innovation: Patents incentivize inventors by providing exclusive rights, thereby fostering innovation and investment in research and development.
• Protection of Intellectual Property: Patents help prevent unauthorized use and exploitation of inventions.
• Knowledge Sharing: Patent holders must disclose the details of their inventions, contributing to the global pool of knowledge and enabling further advancements.
• Economic Growth: A robust patent system promotes economic growth by encouraging innovation, attracting investment, and providing a competitive edge in the global market.

5. Recent Developments in Intellectual Property

• Geographical Indications (GI): There has been a significant increase in GI registrations, showing a threefold rise compared to the previous year.
• Copyright: The fiscal year 2023-24 saw a record number of copyright registrations, totaling 36,378. Efforts are underway to raise awareness about the role of copyright in the creative industry.
• Design Registrations: The highest number of design registrations to date were recorded in FY 2023-24, with a total of 27,819.
• IP Awareness: The National Intellectual Property Awareness Mission (NIPAM) has provided IP training to 24 lakh youths, including students and teachers, across over 7,000 institutions in the past 2 years.

This surge in patent grants and other intellectual property registrations reflects India's growing emphasis on innovation and intellectual property rights. The country's efforts in increasing awareness and promoting intellectual property underscore its commitment to fostering a robust environment for creativity and economic development.