By Dr. Gyan Pathak
India’s jobs market deterioration and failure of the government in decent job creation have sharply pushed up the number of jobs and enterprises in the informal sector, the technical term for which is ‘Unincorporated Sector.’ The Annual Survey of ‘Unincorporated Sector Enterprises (ASUSE) 2023-24’ found an estimated 7.34 crore establishments with a growth rate of 12.84 percent having 12.06 crore workers with a rise of 10.01 percent.GVA was Rs 17,97,278 crore with a growth rate of 16.52 percent. It can be called a robust growth compared to the COVID-19 disruption years, but is an indication of failure in reaching decent job creation targets.
The survey covered unincorporated non-agricultural establishments belonging to three sectors – manufacturing, trade, and other services. These units were under proprietorship, partnership (excluding Limited Liability Partnerships), Self-Help Groups (SHG), co-operatives, societies, trusts etc. As the majority of jobs in such enterprises are not generally covered under social security, these are not considered as decent jobs.
As for the unincorporated enterprises, they are producer units, as per the UN classification, which are not incorporated as a legal entity separate from the owner; the fixed and other assets used in them do not belong to the enterprises but to their owners; the enterprises as such cannot engage in transactions with other economic units nor can they enter into contractual relationships with other units nor incur liabilities on their own behalf; in addition, their owners are personally liable, without limit, for any debts or obligations incurred in the course of production.
ASUSE 2023-24 was conducted during October 2023 to September 2024, which means it also covers the first six months of the current financial year 2024-25, the budget of which has a big flagship programme for decent job creation in India through three Employment Linked Incentive Schemes worth Rs10,000 crore, which is yet to take-off.
Nevertheless, ASUSE 2023-24 highlights the robust recovery after the disruption by COVID-19 crisis in 2020 and 2021, when such enterprises greatly suffered by lockdowns and containment measures that had stopped the economic wheel of the country. It should be noted that the first such full survey was conducted during the financial year 2021-22 from April 2021 to March 2022. The current survey is the third in its series.
ASUSE 2023-24 has found 7.34 crore establishments out of which 2.02 crore were in manufacturing, 2.28 crore in trade, and 3.04 crore in other services sector. It estimated the Gross Value Added (GVA) growth in the unincorporated sector to be 16.52 per cent at current prices during the period from October 2023 to September 2024.
Out of 12.06 crore estimated workers covered in survey year 2023-24 in the unincorporated sector, 5.61 crore were in rural areas and 6.45 crore in urban areas. Worker growth rate in manufacturing was 10.03 percent, in trade 1.93 percent, and in other services 17.86 percent. The survey found an increase in emolument per hired worker increased by 13 percent. It said the emoluments per hired worker was Rs. 1,41,071; per formal hired worker was Rs. 2,91,895; and per informal hired worker was Rs. 1,25,910.
ASUSE 2023-24 says that growth in the unincorporated sector has mainly been driven by the “other services’ sector that recorded an establishment growth of 23.55%, employment growth of 17.86% and GVA growth of 26.17%. Percentage share of GVA in manufacturing was 21 percent, in trade was 35 percent and in other services 44 percent.
Nevertheless, productivity GVA per establishment was only Rs. 2,45,687and GVA per worker was only Rs. 1,49,742, representing growth rate of 3.16 per cent and 5.62 per cent respectively compared to the last survey year. Percentage of female owned proprietary establishments increased from 22.9% in2022-23 to 26.2% in 2023-24. Percentage of establishments using the internet increased from 21.1% in 2022-23 to 26.7%in 2023-24.
The result of the current survey revealed that along with the total number of workers, the total number of hired workers also increased in this sector from 2.95 crore in ASUSE 2022-23 to 3.15 crore in ASUSE 2023-24. The data also revealed that the percentage of market establishment at an overall level increased marginally from 99.56 per cent in survey year 2022-23 to 99.66 per cent in 2023-24.
Percentage of proprietary and partnership establishments remained stagnant at 94.42 percent. Percentage of hired workers establishments declined from 14.94 percent to 13.65 percent, which is bad news for the workforce even in the informal sector. (IPA Service)
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