Unincorporated Sector Sees 13% Growth, 1 Crore Jobs And 13% Wage Hike

The Ministry of Statistics reports a 12.84% rise in unincorporated sector establishments, with over 12 crore workers employed and average earnings up by 13%.

New Delhi:The Ministry of Statistics and Programme Implementation (MoSPI) has highlighted impressive growth in the unincorporated sector. The number of establishments has risen by 12.84%, from 6.5 crore in 2022-23 to 7.34 crore in 2023-24. Employment in this sector also saw a substantial increase, with over 12 crore workers now employed--more than a crore more than the previous year--additionally, the average earnings of workers grew by 13%, signalling a positive trend in both job creation and compensation.

The MoSPI also released the results of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24, which covers the period from October 2023 to September 2024. The survey provides valuable insights into the unincorporated non-agricultural sector, highlighting its significant contribution to employment, GDP and India's broader socio-economic development.

Survey Results

According to the report, the unincorporated sector has experienced strong growth, with the number of establishments rising from 6.50 crore in 2022-23 to 7.34 crore in 2023-24, reflecting an impressive 12.84% increase. The 'Other Services' sector led this growth, recording a remarkable 23.55% rise, while the manufacturing sector also saw a 13% increase. Alongside this, the Gross Value Added (GVA), a key measure of economic performance, surged by 16.52%, largely driven by a 26.17% growth in this sector.

Also, employment in the sector saw significant gains, with more than 12 crore workers now employed, an increase of over one crore from the previous year. The Other Services Sector again took the lead, with employment growing by 17.86%, followed by a 10.03% rise in the manufacturing sector. Notably, gender inclusivity also improved, with the share of female-owned establishments increasing from 22.9% in 2022-23 to 26.2% in 2023-24.

Workers in the sector also saw better pay, with average earnings rising by close to 13%. The manufacturing sector saw the highest wage growth, exceeding 16%. This growth in both employment and wages points to a strengthening labour market within the unincorporated sector. There was also notable progress in the number of hired workers, which grew from 2.95 crore in 2022-23 to 3.15 crore in 2023-24, indicating healthy employment trends. The average annual earnings for hired workers also grew by 13%, from Rs 1,24,842 in 2022-23 to Rs 1,41,071 in 2023-24. The manufacturing sector saw the most significant increase, with wages rising by 16.10%.

Digital adoption was another area of progress, with internet usage among establishments rising from 21.1% in 2022-23 to 26.7% in 2023-24, signalling a shift towards more digital tools for business operations.

Unincorporated Sector

In the Indian economy, unincorporated non-agricultural enterprises, which include small-scale manufacturers, service providers and trade establishments, play a crucial role. These businesses are key to creating jobs, encouraging entrepreneurship and contributing to the country’s GDP. The Annual Survey of Unincorporated Sector Enterprises (ASUSE) is designed to gather detailed information about the operations, finances and structure of these businesses. The data collected from this survey helps policymakers in both government and private sectors make informed decisions and create effective strategies.

The survey covers both rural and urban areas across the country, except remote villages in the Andaman and Nicobar Islands. It includes unincorporated non-agricultural establishments in three key sectors: Manufacturing, trade and other services. These establishments are typically run as proprietorships, partnerships (excluding limited liability partnerships), self-help groups (SHGs), cooperatives, or societies/trusts.

Coverage of the survey

The survey is carried out using a multi-stage stratified sampling method. The first stage involves selecting census villages in rural areas (except rural Kerala where panchayat wards are used) and Urban Frame Survey (UFS) blocks in urban areas. The final units surveyed are the individual establishments. For larger rural or urban areas, an additional step of sampling is done where smaller groups like hamlets or sub-blocks are selected before reaching the individual establishments.

For ASUSE 2023-24, a total of 16,934 first-stage units (FSUs) were chosen--8,581 in rural areas and 8,353 in urban areas-- of these, 16,842 FSUs (8,523 rural and 8,319 urban) were surveyed. In total, 4,98,024 establishments were surveyed during the period from October 2023 to September 2024, with 2,73,085 establishments in rural areas and 2,24,939 in urban areas.