{"id":41584,"date":"2024-07-18T04:30:21","date_gmt":"2024-07-17T23:00:21","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=41584"},"modified":"2025-04-30T21:45:46","modified_gmt":"2025-04-30T16:15:46","slug":"state-of-indias-informal-economy","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/state-of-indias-informal-economy\/","title":{"rendered":"The State of India\u2019s Informal Economy"},"content":{"rendered":"<h2>What\u2019s in today\u2019s article?<\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>Meaning of the Informal Sector of the Economy<\/li>\n<li>About the Annual Survey of Unincorporated Enterprises (ASUSE)<\/li>\n<li>Highlights of the ASUSE<\/li>\n<li>What is the Significance of the ASUSE Data?<\/li>\n<\/ul>\n<h2>Why in News?<\/h2>\n<ul>\n<li>According to the Annual Survey of Unincorporated Enterprises (ASUSE), the informal sector in India faces many challenges.<\/li>\n<li>Over the last seven years, many small and medium enterprises have shut and about 16.45 lakh jobs have been lost.<\/li>\n<\/ul>\n<h2>Meaning of the Informal Sector of the Economy:<\/h2>\n<ul>\n<li>The term <strong>unorganised\/ informal sector<\/strong> is used interchangeably in the India context.<\/li>\n<li><strong>It consists of <\/strong>small and medium enterprises and household proprietary and partnership establishments.<\/li>\n<li>The unorganised sector contributes <strong>over 44%<\/strong> to the country\u2019s gross value added (GVA) and employs <strong>nearly 75% of the workforce <\/strong>employed in non-agricultural enterprises.\n<ul>\n<li>This means the sector accounts for almost half of India\u2019s economic output and more than three-fourths of employment.<\/li>\n<\/ul>\n<\/li>\n<li>The share of the unorganised sector is highest in <strong>agriculture <\/strong>as the holdings are small and fragmented. This is followed by trade, construction, real estate, professional services, etc.<\/li>\n<\/ul>\n<h2>About the ASUSE:<\/h2>\n<ul>\n<li>The ASUSE was released for the 2021-22 and 2022-23 by the Union Ministry of Statistics and Programme Implementation (<strong>MoSPI<\/strong>).<\/li>\n<li>It carried out surveys for <strong>unincorporated<\/strong> non-agricultural establishments in three sectors: manufacturing, trade, and other services.\n<ul>\n<li><strong>Unincorporated enterprises<\/strong> are enterprises in the unorganised\/ informal sector, comprising MSMEs, household units including those with hired workers, and own-account enterprises.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Manufacturing units<\/strong> other than those covered under the Factories Act 1948 and the organised manufacturing sector covered by the Annual Survey of Industries (ASI), have been surveyed.<\/li>\n<li><strong>Under trade and other services<\/strong>, proprietary and partnership establishments (excluding LLPs), co-operatives, self-help groups, non-profit institutions, etc., are included.<\/li>\n<\/ul>\n<h2>Highlights of the ASUSE:<\/h2>\n<ul>\n<li><strong>The number of workers<\/strong> employed in the informal sector in 2022-23 has dropped by 16.45 lakh or about 1.5 per cent to 10.96 crore compared to 11.13 crore in 2015-16.<\/li>\n<li><strong>The number of unincorporated enterprises<\/strong> increased by 16.56 lakh from to 6.50 crore in 2022-23 from 6.33 crore in 2015-16.<\/li>\n<li><strong>The real GVA of unincorporated sector<\/strong> enterprises grew by 6.9% in 2022-23, which was still lower than the pre-pandemic level.<\/li>\n<\/ul>\n<h2>What is the Significance of the ASUSE Data?<\/h2>\n<ul>\n<li><strong>A crucial employment indicator:<\/strong> This is because the informal sector is closely watched for its employment generation capacity and absorption of the labour force (especially semi-skilled and unskilled labour).<\/li>\n<li><strong>Highlights the impact of 3 shocks on the informal sector:<\/strong>\n<ul>\n<li>The data available for the first time since 2015-16, provides an understanding of the impact of the 3 major exogenous shocks on the growth of unincorporated enterprises and the employment in these enterprises.<\/li>\n<li>These shocks are <strong>demonetisation <\/strong>in November 2016, rollout of the <strong>Goods and Service Tax<\/strong> in July 2017, and the <strong>Covid-19 pandemic<\/strong> in March 2020.<\/li>\n<li>Much of the brunt of these 3 shocks is borne by the informal sector.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Presents state-specific data:<\/strong>\n<ul>\n<li><strong>Maharashtra, Bihar, Gujarat, MP and Odisha<\/strong> recorded an increase in the informal employment between 2015-16 and 2022-23.<\/li>\n<li><strong>UP, West Bengal, Tamil Nadu, Karnataka and Andhra Pradesh<\/strong> registered a decline in the number of informal sector workers during the same period.<\/li>\n<li>These ten states account for nearly three quarters of the informal sector workers employed in India.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Depicts a broad decline in employment quality:<\/strong> Most new jobs in the sector were created in own-account enterprises rather than hired-worker units.<\/li>\n<\/ul>\n<p><strong>Matches with the Periodic Labour Force Survey (PLFS):<\/strong> As per PLFS 2022-23, there was an increase in workers in agriculture, and a decrease in manufacturing.<\/p>\n<hr \/>\n<h3>Q.1. What is the Periodic Labour Force Survey (PLFS)?<\/h3>\n<p>PLFS is conducted by the MoSPI since 2017-18 and gives estimates of Key employment and unemployment Indicators like, the Labour Force Participation Rates (LFPR), Worker Population Ratio (WPR), Unemployment Rate (UR), etc.<\/p>\n<h2>Q.2. What is the National Sample Survey Office (NSSO)?<\/h2>\n<p>NSSO has been responsible for conducting large-scale sample surveys in diverse fields on an All India basis since 1950. Primarily data are collected through nation-wide household surveys on various socio-economic subjects, Annual Survey of Industries (ASI), etc.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/after-three-shocks-16-45-lakh-jobs-lost-in-informal-sector-over-7-yrs-9448015\/\" target=\"_blank\" rel=\"nofollow noopener\">After three shocks, 16.45 lakh jobs lost in informal sector over 7 years<\/a> | <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/explained-the-state-of-indias-informal-economy-9459931\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Annual Survey of Unincorporated Enterprises (ASUSE), many small and medium enterprises have shut and about 16.45 lakh jobs have been lost between 2015-16 and 2022-23<\/p>\n","protected":false},"author":5,"featured_media":41585,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-41584","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=41584"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41584\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/41585"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=41584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=41584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=41584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}