Job creation slows in unincorporated sector in 2023-24: NSO report

Fresh employment generation in the unincorporated sector slowed in the October 2023-September 2024 period, with additional job creation dipping to 10.97 million during this interval as compared to the equivalent figure of 11.74 million in October 2022-September 2023.

 

In contrast, the unincorporated sector added more establishments in 2023-24 at 8.35 million as compared to 5.34 million during 2022-23.

 

This is according to the latest fact sheet, titled “Annual Survey of Unincorporated Sector Enterprises (ASUSE)”, released by the National Statistical Office (NSO) on Tuesday. Unincorporated enterprises refer to business entities that are not legally registered under the Companies Act, 1956, or under the Companies Act, 2013.

 

These enterprises typically include small businesses, sole proprietorships, partnerships, and informal- sector businesses. The data showed the number of unincorporated establishments stood at 73.4 million in the October 2023-September 2024 period, up from 65.04 million in October 2022-September 2023. 

 

Similarly, the number of workers employed in the sector stood at 120.6 million, up from 109.6 million during the corresponding period.

 

Speaking at the release of the survey results, Chief Economic Advisor V Anantha Nageswaran said this data showed the lagged effect of the growth spurt that started when the pandemic abated after the first quarter of 2021-22. 

 

Various government initiatives that supported micro, small, and medium enterprises during the pandemic allowed them to stabilise and once the economy began to grow, they were able to grow along their own steam as well, and that is what this survey reveals,” Nageswaran added.

 

However, Santosh Mehrotra, visiting professor, University of Bath, said the sector was yet to recover from the impact of successive policy shocks like demonetisation, goods and services tax (GST), and the pandemic lockdown. The rise in the number of establishments is primarily due to the increase in the share of own-account enterprises (OAEs) as compared to the share of hired-worker enterprises (HWEs), which employ at least one hired worker on a fairly regular basis.

 

The distress in the economy is clearly visible with GDP (gross domestic product) growth flattening in Q2 and the latest annual Periodic Labour Force Survey data also showing that the share of people engaged in agriculture increased by around 2 million. As a result of this distress, people are setting up their own enterprises for survival, which is being wrongly construed as entrepreneurship,” he added.

 

The fact sheet also showed gross value added (GVA) by the unincorporated sector rose by 16.5 per cent to Rs 17.97 trillion in October 2023-September 2024 from Rs 15.42 trillion in October 2022-September 2023.

 

Moreover, average emolument per hired worker increased 13 per cent to Rs 1,41,000 in 2023-24 over 2022-23, signalling improvement in wage levels.

 

Also, the share of establishments using the internet has grown to 26.7 per cent in 2023-24 from 21.1 per cent in 2022-23.

 

This substantial growth reflects a strong trend toward digital adoption among establishments, highlighting the increasing reliance on the internet for business operations,” said the NSO in a statement.