The economic loss, particularly to the informal sector owing to the cumulative impact of macroeconomic shocks since 2016, including the demonetisation of high-value currency notes, the roll-out of the Goods and Services Tax (GST) and the COVID-19 pandemic, is estimated at 4.3% of GDP in 2022-23 or ₹11.3 lakh crore, India Ratings and Research said
63 lakh informal enterprises shut down between 2015-16 and 2022-23, with about 1.6 crore jobs lost
In FY23, the Gross-Value Added (GVA) in the economy by such unincorporated enterprises was still 1.6% below FY16 levels
Moreover, their compounded annual growth rate (CAGR) was 7.4% between FY11 and FY16, but slid into a 0.2% contraction since then, the rating firm reckoned based on the recently released findings of the official Annual Survey of Unincorporated Sector Enterprises (ASUSE)
As per the survey, the number of establishments in the non-agricultural sector rose to 6.5 crore in FY23 from 5.97 crore in FY22, with employment rising to 10.96 crore from 9.79 crore workers.
However, this was lower than the 11.13 crore people employed in the sector in the ‘pre-shock period’ of FY16.
This was primarily due to a decline in manufacturing jobs which stood at 3.06 crore in FY23, compared with 3.6 crore in FY16.
The shrinkage has been sharper in other services and trade, the informal sector’s share dropped to 32.3% and 21.2% in FY23 from the pre-shock level of 46.9% and 34.3%, respectively.
In the manufacturing sector, the share of the informal sector fell to 10.2%, from 12.5% during the same period
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