Annual Survey of Unincorporated Enterprises (ASUSE)

Source: The post Annual Survey of Unincorporated Enterprises (ASUSE) has been created, based on the article “Explained: The state of India’s informal economy, what the numbers say on jobs” published in “Indian Express” on 18th July 2024

UPSC Syllabus Topic: GS Paper3- Economy -employment

Context: The article discusses the challenges faced by India’s informal sector, based on data from the Annual Survey of Unincorporated Enterprises (ASUSE). It highlights significant job losses and a decrease in employment quality over seven years, influenced by major economic disruptions such as demonetization, the GST rollout, and the COVID-19 pandemic. The survey data from the National Sample Survey Office provides a detailed look at these trends.

For detailed information on India’s informal sector read this article here

What is the Annual Survey of Unincorporated Enterprises (ASUSE)?

The Annual Survey of Unincorporated Enterprises (ASUSE) focuses on gathering data from unincorporated enterprises in India.

1. Conducted By: The ASUSE is conducted by the National Sample Survey Office (NSSO).
2. Definition and Scope: Unincorporated are enterprises in the unorganised or informal sector, comprising Micro, Small and Medium Enterprises (MSMEs), household units including those with hired workers, and own-account enterprises.
3. Sector Coverage: ASUSE specifically surveys these enterprises in three sectors: manufacturing, trade, and other services. It excludes enterprises under the Factories Act and the organized sectors surveyed by the Annual Survey of Industries.

4.. Composition: These enterprises include proprietary and partnership establishments that are not organized as Limited Liability Partnerships (LLPs), along with other collective forms like cooperatives and self-help groups.

What Challenges Has the Informal Sector Faced?

1. Economic Shocks: The informal sector faced major disruptions from demonetization in 2016, GST rollout in 2017, and the COVID-19 pandemic starting in 2020. These events led to financial instability and operational challenges for many informal businesses.
2. Quality of Employment: There was a shift towards own-account enterprises, suggesting a decline in the quality of employment, as fewer hired-worker units were maintained.

What are the major outcomes of this survey?

1. Employment Decrease: Employment in the informal sector dropped by 16.45 lakh, from 11.13 crore in 2015-16 to 10.96 crore in 2022-23.
2. Enterprise Increase: The number of unincorporated enterprises increased by 16.56 lakh, reaching 6.50 crore in 2022-23 from 6.33 crore in 2015-16.
3. Shift in Employment: Own-account enterprises rose nearly 4%, while hired-worker enterprises declined by 3.2%.
4. Women in Agriculture: The share of women in agriculture increased to 64.3% in 2022-23 from 55.3% in 2018-19.
5. Sector-Specific Trends: Sector-Specific Trends: Manufacturing units fell by 9.3%, and the number of workers in manufacturing dropped by 15%. Trade units decreased by 2%, but worker numbers rose by 0.8%. Service sector units grew by 19.1%, with a 9.5% increase in workers.
6. State-Level Changes: Sixteen out of 34 states/UTs recorded a decline in informal sector workers, reflecting varying economic impacts and recovery patterns post-pandemic.

Question for practice:

Examine the changes in employment and enterprise numbers in India’s informal sector over the seven-year period covered by the Annual Survey of Unincorporated Enterprises (ASUSE).