Retail and Apparel Lead Informal Sector Employment, Driven by Digitisation: MoSPI Report

The unincorporated non-agricultural sector employed about 11 crore workers from October 2022 to September 2023, up from 9.8 crore in ASUSE 2021-22. More than one-third of this labour force was engaged in the states of Uttar Pradesh, Maharashtra and West Bengal.
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The Ministry of Statistics and Programme Implementation (MoSPI) has revealed insightful trends in the informal sector through its Annual Survey of Unincorporated Enterprises (ASUSE) for 2021-22 and 2022-23. Retail trade, manufacturing of wearing apparel, and community, social, and personal services have emerged as the leading categories in this sector, employing the most significant number of workers.

Growth in Informal Sector Establishments

The informal sector has shown remarkable growth, with the number of establishments rising from 5.97 crore in 2021-22 to 6.50 crore in 2022-23, marking a 5.88% annual growth. The “other services” sector topped the list, accounting for 37.88% of enterprises in 2022-23, followed closely by trade (34.71%) and manufacturing (27.41%).

Employment Distribution

Retail trade led the way, comprising 30.38% of enterprises and employing 29.80% of the total workforce. The manufacturing of wearing apparel also stood out, representing 11.27% of establishments and employing 8.39% of workers. The unincorporated non-agricultural sector employed approximately 11 crore workers from October 2022 to September 2023, up from 9.8 crore the previous year. A significant portion of this workforce is based in Uttar Pradesh, Maharashtra, and West Bengal.

Rise of Digitisation

A notable trend in the survey is the increased use of the internet for entrepreneurial activities, which rose by 7.2%. This indicates a rapid rate of digitisation in the informal sector, signaling a shift towards more modern business practices.

Economic Contribution and Workforce Composition

The Gross Value Added (GVA) by unincorporated sector enterprises grew by 9.83% at current prices from October 2022 to September 2023 compared to the April 2021-March 2022 period. Uttar Pradesh recorded the highest number of establishments, followed by West Bengal and Maharashtra. The proportion of female workers saw a slight increase, rising to 25.63% in 2022-23 from 25.52% in the previous year.

Conclusion

The ASUSE report highlights the dynamic nature of the informal sector in India, underscoring significant growth in retail and apparel manufacturing. The increasing digitisation points to a transformative phase for small and unincorporated enterprises. With continuous growth and digital adoption, the informal sector remains a crucial component of India’s economy, driving employment and innovation.


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