Rising Wage Gap Between Formal And Informal Sector To Expand Informality Further: FISME


(MENAFN- KNN India) New Delhi, Dec 28 (KNN) India's unincorporated non-agricultural enterprises surged to 7.34 crore in 2023-24, marking a 12.84 per cent increase from the 6.5 crore recorded in 2022-23, according to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) conducted by the Ministry of Statistics and Programme Implementation (MoSPI).

The survey, covering the period from October 2023 to September 2024, highlights a significant expansion in these enterprises, with notable growth in both manufacturing and service sectors.

Commenting on the findings of the survey Secretary General of Federation of
Indian Micro and Small & Medium Enterprises (FISME) Anil Bhardwaj said,“ The survey clearly points out to the increasing gap between wages of formal and informal markets. The emoluments of per hired worker in formal sector was Rs. 2.91 lakhs and Rs. 1.25 lakh in informal sector in 2024. The corresponding figures were Rs. 2.4 lakh for formal and Rs. 1.10 lakh in 2023”.

“The high wage difference between formal and informal segments highlights why MSMEs hesitate hiring workers on rolls. It asks for rationalisation of labour laws including minimum wages and applicability of ESI and PF on small businesses”, he said.

The manufacturing sector saw a 13 per cent rise in the number of enterprises, while the“other services” sector recorded a remarkable 23.55 per cent growth. This expansion fuelled a 16.52 per cent increase in Gross Value Added (GVA), a key measure of economic performance.

The GVA per worker, reflecting labor productivity, grew by 5.62 per cent to Rs 1,49,742 from Rs 1,41,769 in 2022-23, while the Gross Value of Output (GVO) per establishment rose to Rs 4,91,862 from Rs 4,63,389 in current prices.

Employment in the unincorporated sector also experienced substantial growth, with over 12 crore workers employed during 2023-24, an increase of more than one crore from the previous year.

The survey notes a positive shift towards inclusivity, with female-owned proprietary establishments rising
from 22.9
per cent in 2022-23 to 26.2 per cent in 2023-24.

Technology adoption also made strides, as the percentage of establishments using the internet increased
from 21.1per cent to 26.7 per cent.

Additionally, the average emolument per hired worker rose by 13 per cent, reflecting improved compensation trends in the sector.

ASUSE provides critical insights into the operational and economic characteristics of India's unincorporated enterprises across manufacturing, trade, and other services (excluding construction).

For the 2023-24 survey, data were collected from 4,98,024 establishments spanning rural and urban areas.

These findings underscore the resilience and dynamism of India's unincorporated sector, which plays a vital role in the country's economic fabric, driving employment, productivity, and entrepreneurship.

(KNN Bureau)

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KNN India

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