In the dynamic economic tapestry of India, the informal sector holds a significant position, providing employment and contributing to economic activity. The latest Annual Survey of Unincorporated Enterprises for 2022-23, released by the Ministry of Statistics and Programme Implementation (MoSPI), highlights the shifting landscape of informal sector enterprises across various states. Uttar Pradesh, West Bengal, and Maharashtra emerged as the top states with the highest share of informal sector enterprises during this period.
Informal Sector Enterprises in 2022-23: Key Highlights
Uttar Pradesh: Leading the Informal Sector
Uttar Pradesh (UP) recorded the highest share of informal sector enterprises among major states in 2022-23, with a notable increase from the previous year. The state’s share rose to 13.83%, up from 12.99% in 2021-22. This growth underscores UP’s expanding informal economy, reflecting its resilience and capacity to absorb labor force despite economic fluctuations.
West Bengal: A Mixed Bag
West Bengal secured the second position, with a share of 12.04% in 2022-23. Although there was a slight dip from 12.31% in the previous year, the state maintained a strong presence in the informal sector. The number of informal sector workers in West Bengal saw a marginal increase, indicating a steady demand for labor in this segment.
Maharashtra: Steady Growth
Maharashtra’s share in the informal sector rose to 9.37% in 2022-23, up from 8.81% in 2021-22. The state showed a consistent increase in the number of informal sector workers, reflecting a robust informal economy that continues to thrive and expand.
Trends and Insights
Post-Pandemic Shifts
The post-pandemic period brought significant changes to the informal sector landscape. While some states like Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, and West Bengal experienced a decline in their share of informal sector enterprises, others, including Uttar Pradesh, saw an increase. This shift highlights the varying impacts of the pandemic on different regions and their adaptive capabilities.
Employment Dynamics
The informal sector is crucial for employment generation, especially during economic slowdowns. In 2022-23, over 10.96 crore workers were employed in the unincorporated non-agricultural sector. This included working owners, hired workers, unpaid family members, and others. Urban areas contributed 5.72 crore workers, while rural areas accounted for 5.24 crore workers.
Long-Term Comparisons
Comparing data from the National Sample Survey’s 73rd round on Unincorporated Enterprises for 2015-16 reveals long-term trends. Uttar Pradesh saw a decline in informal sector workers from 1.65 crore in 2015-16 to 1.57 crore in 2022-23, despite a rise from 1.30 crore in 2021-22. Similarly, West Bengal experienced a drop from 1.35 crore in 2015-16 to 1.05 crore in 2022-23, with a slight increase from 1.02 crore in 2021-22. Maharashtra, however, recorded an increase throughout the period, rising to 1.15 crore in 2022-23 from 91.23 lakh in 2015-16 and 98.81 lakh in 2021-22.
The Road Ahead
The informal sector remains a vital part of India’s economy, providing employment opportunities and supporting livelihoods. As the country navigates post-pandemic recovery, the resilience and adaptability of this sector will be crucial. Policymakers and stakeholders must continue to monitor these trends and implement supportive measures to ensure sustainable growth and development.