India’s huge non-farm informal sector was hit difficult by the second wave of the Covid-19 pandemic, but has since gradually recovered, with the number of unincorporated businesses and their employees increasing by almost 6% and 8% respectively in the latter, according to an official research, mid 2022–2023
The gross value added (GVA) of such enterprises increased by 9.83% at current prices during October 2022 to March 2023 compared to financial year 2021-22, according to the fact sheet of the Annual Survey of Enterprises in the Unincorporated Sector (ASUSE ) conducted by the National Sample Survey Office (NSSO) in 2021-22 and 2022-23.
“Unincorporated manufacturing, trade and service activities appear to have been hit difficult by the second wave of the pandemic; however, the situation has gradually improved since July 2021,” NSSO noted.
“Lower reporting”
In April-June 2021, at the peak of the deadliest wave of Covid-19, the number of informal enterprises was estimated at 50.32 lakh, employing 85.6 lakh workers. Meanwhile, research conducted between January and March 2022 estimated the number of such companies at 1.91 crore employing 3.12 crore. NSSO said lower reporting in the first quarter has largely impacted the overall annual estimate for 2021-22, which assumes 5.97 crore companies employing nearly 9.8 crore employees.
“Sudden job growth”
Between October 2022 and March 2023, the estimated number of informal businesses increased to 6.5 crore and employed 11 crore workers. “That’s 7.84% annual growth [in jobs] shows the sector’s ability to generate employment,” NSSO said, adding that the maximum employment growth during this period was observed in other services (13.42%), followed by industrial processing (6.34%).
The survey data, released by the Ministry of Statistics on Friday, is used to compile national accounts statistics because the country’s unincorporated non-farm sector plays a key role in job creation, economic value and the overall socio-economic landscape.