Resilience or stress?

Employment in informal manufacturing enterprises is not back to pre-demonetisation levels

The official narrative on the findings of the National Statistical Office's latest Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24 is that it indicates robust recovery from the disruption caused by Covid-19. Key metrics such as the number of establishments, workers, wages, and productivity show significant year-on-year growth, although this partly reflects the fact that the favourable base effect created by the pandemic is still playing out.

Even so, this has implications for the India growth story as it depends on the health of the vast number of unincorporated non-agricultural enterprises—which are not legally registered as companies—that belong to the informal sector. These enterprises are not just stand-alone entities but also support the incorporated or formal sector by acting as suppliers and services providers, thereby forming an integral part of the domestic value chain. These small businesses contribute 28 to 30% of the nation's output of goods and services or GDP and 40% of employment.