Recently, the Ministry of Statistics and Programme Implementation (MoSPI) announced the key results of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2021-22 and 2022-23 https://thewire.in/economy/the-jobless-growth-of-unorganised-enterprises-is-worrisome
The Indian unincorporated sector was devastated by triple shocks – demonetisation in November 2016, poorly designed and unplanned GST implementation in July 2017 and one of the world’s strictest COVID-19 lockdowns announced at barely four hours’ notice in March, 2020. These shocks clearly affected India’s annual GDP growth rate – 8.3% in 2016, 6.8% in 2017, 6.5% in 2018 and 3.9% in 2019 (MoSPI). This shows that India’s GDP already slowed before COVID-19 even began, i.e. before the first wave of 2020. This slowdown had already been reflected in the slower GDP growth prior to COVID-19, in fact since 2016, but also in the fact that India experienced the highest unemployment rate in its history – of 6.1% in 2017-18 – long before COVID. The MSMEs of the unorganised sector were very much part of this sharp slowdown in both growth as well as non-farm employment since 2016.
Notable is the fact that most non-farm employment outside the corporate sector is in MSMEs, most of which consist of unregistered enterprises in the unorganised sector. If they are adversely impacted by three successive policy-induced shocks, it is only logical that employment should fall. That is exactly what happened.
by Santosh Mehrotra and Tuhinsubhra Giri
20/06/2024