In India, 18 lakh unincorporated enterprises in the manufacturing sector were closed within 7 years leading to 54 lakh people losing their jobs in this sector. This has been revealed by the analysis of the data of Annual Survey of Unincorporated Sector Enterprises (ASUSE) and National Statistic Office. It was found that the manufacturing sector has declined by 9.3 per cent in 7 years, but 35 lakh jobs were increased in the service sector with a nearly 40 lakh increase in enterprises.
Unincorporated enterprises in the manufacturing sector lost nearly 18 lakh establishments and shed 54 lakh jobs between July 2015-June 2016 and October 2022-September 2023, an analysis of the fact sheet on ‘Annual Survey of Unincorporated Sector Enterprises (ASUSE)’ and the comparable 73rd round survey in 2015-16 by the National Statistical Office (NSO) showed.
According to the NSSO, there were 1.97 crore unorganized industries in this sector between July 2015-June 2016. According to ASUSE, their number decreased to 1.78 crore between October 2022- September 2023. Similarly, the number of workers engaged by these establishments declined by nearly 15 per cent to 3.06 crore (2022-23) to 3.60 crore (2015-16).
What are Unincorporated Enterprises?
Unincorporated enterprises refer to business entities that are not legally incorporated as separate legal units. These typically include small businesses, sole proprietorships, partnerships, and informal sector businesses. Between October 2022 and September 2023, 1.17 crore new workers were added, but this figure is also less than the pre-Corona period.
What is the cause of loss of jobs?
According to experts, the unincorporated sector has been badly affected by continuous economic shocks like demonetization, GST and Corona epidemic in the last decade. An establishment employs only 2.5-3 people on average and these are mostly own corporates usually employing family members, leading to a loss of nearly 54 lakh jobs in the manufacturing sector. Also, according to labor economist Santosh Mehrotra, small, micro and medium enterprises (MSMEs) provide the most employment in the non-agricultural sectors of the country. The total number of industries has increased after the epidemic, but most of them do not employ other people.
The analysis of the data also shows that the number of unincorporated enterprises in the “trading” sector declined by 2 per cent to 2.25 crore in October 2022-September 2023 from 2.3 crore in July 2015-June 2016, even as the number of workers engaged in the sector saw a marginal growth to 3.9 crore from 3.87 crore during this time period.
Total Jobs (in lakhs)
Year: 2015-2016, 2022-2023
Manufacturing: 360.4, 306.2 (-54.1)
Trade: 387.4, 364.8 (+2.9)
Services: 390.3, 399.6 (+34.7)
Total industries (in lakhs)*
2015-2016
- Manufacturing: 196.6
- Trade: 230.3
- Services: 206.8
2022-2023
- Manufacturing: 178.2 (-18.3)
- Trade: 225.7 (-4.6)
- Services: 246.4 (+39.5)
*Data of July 2015-June 2016 is based on NSO survey, while based on October 2022-September 2023 is based on ASUSE survey.
In other sectors, the number of unorganized industries increased by 19% from 2.06 crore to 2.46 crore. Workers increased from 3.65 crore to 3.99 crore but 35 lakh jobs increased in the service sector.