The unincorporated non-agricultural sector in India has added about 11 million more jobs in October 2023-September 2024 with respect to the year-ago period, with addition of 8.4 million establishments, official data released on Tuesday showed. This shows while corporate sector is witnessing a stagnation in employment creation and wages, jobs have started rising again among the smaller units, which were hit hard by the pandemic.
According to the fact-sheet of Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24, the number of workers in the unincorporated sector (which includes both formal and informal sectors) stood at 120.6 million till September-end, which is 10% higher than last year.
The wage growth too recorded a 13% increase, in nominal terms, year-on-year in the unincorporated sector, which is significantly higher than (-)1.1% growth recorded during 2022-23. The real increase in wages was, of course, lower — retail inflation during the same period (October 2023-September 2024) averaged 4.9%. Also, the favoutable base effect created by the pandemic is still playing out.
Chief economic advisor V Anantha Nageswaran said that the survey shows that real emolument growth –for both formal & informal workers–has been “significant” in the unincorporated sector in 2023-24.
The real wage growth in the unincorporated sector is way higher than the overall wage growth, which takes into account emoluments paid in the formal listed & unlisted sector as well. Earlier in December, Nageswaran had raised concerns over poor compensation to employees by India Inc, and had said that it could adversely impact consumer demand.
Analysts have been repeatedly saying that low real wage growth in urban demands is pulling down consumption demand, and consequently GDP growth. “Overall urban consumption includes the listed as well unlisted corporate sector…but, as per ASUSE 2023-24, emoluments (in unincorporated sector) have grown quite well,” the CEA said.
Meanwhile, the gross value added (GVA) growth of the country’s unorganised enterprises, recorded a 16.5% growth in 2023-24 as against 16.1% in previous year.
“This data shows the lagged effect of growth spurt. Various policy initiatives were supportive of entrepreneurship. Govt initiatives on start-up and stand-up India during Covid has allowed enterprises to grow,” Nageswaran said.
Moreover, at the presser, statistics secretary Saurabh Garg highlighted an increase in labour productivity in 2023-24, as gross value added per worker registered a 5.6% increase to Rs 1.5 lakh in 2023-24 from Rs 1.42 lakh in 2022-23. “There are now 7.4 crore establishments, and over 12 crore people are employed. Productivity of enterprises is also increasing,” Garg said.
The total number of establishments in the sector increased substantially from 65 million in 2022-23 to 73.4 million in 2023-24, representing a 12.8% growth. Among the broad sectors covered– manufacturing,trade, and other services–the number of establishments in the other Services’ sector recorded a growth of 23.6% followed by a 13% increase witnessed by the manufacturing sector.
Additionally, the percentage of female-owned proprietary establishments increased from 22.9% in 2022-23 to 26.2% in ASUSE 2023-24. This trend indicates a positive shift in the participation of women in business ownership, highlighting an increase in female entrepreneurship over the given period, said Garg.
The data further showed a push for digital adoption among unincorporated sector enterprises. “The digital economy is increasing, and the expansion of digital public infra is showing. Nearly 27% of businesses use the internet, female-owned establishments have also increased,” Garg highlighted.
