Daily News Analysis

Annual Survey of Unincorporated Enterprises (ASUSE) - 2021-22 and 2022-23

stylish_lining

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.

Public Distribution System (PDS)

India's Public Distribution System (PDS) has long been a cornerstone of food security, ensuring access to subsidised cereals for millions of people. However, a recent Crisil study using the &l
Share It

Saudi-Pakistan Strategic Mutual Defense Agreement (SMDA)

The recent Saudi-Pakistan Strategic Mutual Defense Agreement (SMDA) represents a major shift in the geopolitical landscape of the Middle East and South Asia, with significant implications for Indi
Share It

Wassenaar Arrangement

The Wassenaar Arrangement is facing significant challenges in adapting its controls to the rapid growth of cloud technology. This issue highlights the need to update its control lists and enforcem
Share It

National Crime Records Bureau (NCRB)

The National Crime Records Bureau (NCRB) report for 2023 highlights a 9.2% increase in crimes against children in India, with 177,335 cases registered in total. This reflects a concerning rise in
Share It

Doctrine of Contributory Negligence

The Andhra Pradesh High Court recently made an important ruling regarding the doctrine of contributory negligence in criminal law. The court clarified that contributory negligence does not apply t
Share It

Perpetual Bonds

The Indian Renewable Energy Development Agency Ltd (IREDA) recently raised ₹453 crore at an interest rate of 7.70% per annum through its second issue of Perpetual Bonds. This move is part of the
Share It

Fake News

The Standing Committee on Communications and Information Technology in India has recently proposed several measures aimed at tackling the pervasive issue of fake news and misinformation, acknowled
Share It

Vembanad Lake

Vembanad Lake, the largest lake in Kerala, is facing significant ecological stress due to unchecked tourism, the proliferation of luxury houseboats, and decades of encroachment. About Vembanad
Share It

National Co-operative Exports Limited (NCEL)

The recent Memorandum of Understanding (MoU) between National Co-operative Exports Limited (NCEL) and the Agricultural and Processed Food Products Export Development Authority (APEDA) is a signifi
Share It

World Duchenne Muscular Dystrophy Day

The Ministry of Social Justice & Empowerment, Government of India, observes World Duchenne Muscular Dystrophy (DMD) Day every year on 7th September to raise awareness about this rare and serio
Share It

Newsletter Subscription


ACQ IAS
ACQ IAS