NSSO’s Annual Survey Highlights Glaring Shortcomings in Data Collection

June 14, 2024 – New Delhi:

The release of the "Annual Survey of Unincorporated Sector Enterprises (ASUSE)" by the National Sample Survey Office (NSSO) on June 14, 2024, has brought to light significant gaps and inconsistencies in official statistics. These shortcomings are not merely academic; they carry profound implications for policy-making, especially in an economy as complex as India’s. The survey’s partial data, lack of context, and surprising omissions reveal deeper issues in statistical governance.

Overview and Core Findings

The ASUSE report is divided into two annual reports — ASUSE 2021-22, covering the period from April 2021 to March 2022, and ASUSE 2022-23, covering October 2022 to September 2023. These reports focus on informal non-farm sectors in manufacturing, trade, and other services (excluding construction).

The surveys aim to gauge the employment scenario in the unincorporated non-agricultural sector, cater to various ministry requirements concerning MSMEs, textiles, labor, and employment, and provide essential data for policymakers and stakeholders to understand and support this crucial economic segment.

Key Statistics and Observations

• Establishment Numbers: In 2021-22, there were 59.7 million establishments, a number that rose to 65 million in 2022-23, indicating a growth of 9%. Manufacturing establishments grew by a mere 2.2%, while the "other services" sector saw a significant increase of 15%.
• Employment Data: The workforce in these establishments grew from 97.9 million in 2021-22 to 109.6 million in 2022-23, indicating a 12% increase.
• Family and Hired Workers: Family members comprised 86% and 85% of the workforce in 2021-22 and 2022-23, respectively. Among the hired workers, 88% were without social security in 2021-22, a figure that increased to 92.9% in 2022-23.
• Wage Trends: The wages for hired workers fell from ₹126,243 in 2021-22 to ₹124,842 in 2022-23.
• Gross Value Added (GVA): The GVA share of these establishments declined drastically from 12.4% in FY21 to 6.3% in FY23.

Contextual Analysis and Historical Comparisons

The data from these surveys lack the necessary context to provide an accurate picture. For instance, comparing FY21 numbers, which were severely affected by the second wave of the pandemic, with 2022-23 figures can create an inflated sense of growth. This comparison does not account for the resumption of operations post-pandemic, which skews the growth rates.

For a more accurate perspective, one would need to look at the 2015-16 ASUSE, formally titled "Key Indicators of Unincorporated Non-Agricultural Enterprises (Excluding Construction) in India, 2015-16." During that period (July 2015-June 2016), there were 63 million informal non-farm establishments employing 111 million workers, contributing 9.2% to the GVA. A comparison with the 2022-23 ASUSE would show only a 2 million increase in establishments, a 1 million decrease in jobs, and a 2.9 percentage point drop in GVA share.

Historical Policy Impact

The exclusion of the 2015-16 survey from recent comparisons is particularly glaring given the significant economic events that have occurred since then—demonetization in November 2016, the introduction of the GST in July 2017, and the COVID-19 pandemic in 2020. Mapping establishments covered during the 2015-16 survey to gauge the impact of these shocks could have informed fiscal and policy measures necessary to revitalize productivity and job creation in the non-farm sectors. Such detailed analysis could have been invaluable for the upcoming FY25 budget.

Report Deficiencies

The 2015-16 survey provided a comprehensive view with intricate details on the distribution of establishments and workers across sectors, states, and gender lines. It also included data on skilled manpower, waste management, toilet facilities, and original investments in plant and machinery. In stark contrast, the latest ASUSE reports are minimalist, with the factsheet spanning only 13 pages and the press note 6 pages.

Pattern of Data Omission

There is an unsettling trend in the collection and dissemination of statistical data. For example, despite six annual Periodic Labour Force Survey (PLFS) reports since 2017-18, the actual size of the Indian workforce remains unknown. It was the Azim Premji University’s 2019 study that first calculated the workforce at 465.1 million, noting a historic job loss of 9 million compared to 2011-12. However, these estimates are not government-sanctioned data.

The ASUSE also does not provide clear numbers on informal sector employment, despite agriculture employing 45.8% of workers, a figure reported in the 2022-23 PLFS but not specified in absolute terms. The Ministry of Labour and Employment still relies on outdated NSSO data from 2009-10 to claim that informal workers constitute 94% of the workforce.

Implications for Policy

The National Statistical Commission’s (NSC) 2012 "Report of the Committee on Unorganised Sector Statistics" had already highlighted the lack of reliable statistics on the unorganised sector as a significant constraint to effective policy-making. Despite this, India still lacks a coherent national policy to address the job crisis—a situation aggravated by unimplemented labor codes and the shelving of a new industrial policy in December 2023 in favor of Production-Linked Incentive (PLI) and Design-Linked Incentive (DLI) schemes.

Sectoral Concerns and Economic Indicators

Moreover, the consumer expenditure survey of 2022-23, released in February 2024, like the ASUSE, lacks crucial volume data, thereby rendering it unable to assess the impact of inflation. Historical precedent also shows manipulation of unfavorable data, such as the 2017-18 HCES being junked and the unemployment rate from PLFS 2017-18 withheld until after the 2019 general elections.

Furthermore, essential indicators like the Index of Industrial Production (IIP), Consumer Price Index (CPI), and Wholesale Price Index (WPI) are based on outdated data, with no Economic Census post-2016. The poverty line estimate, another critical indicator, is also woefully outdated.

Conclusion

The significant deficiencies in the latest ASUSE reports underscore a disturbing pattern of inadequate statistical data collection and dissemination, hampering effective policy-making. In an economy facing a real job crisis, with quality formal employment opportunities dwindling and increasing reliance on low-productive, low-paying informal agriculture, the need for robust, reliable data has never been more urgent. Effective policy to address these issues requires high-quality data, something that current practices are failing to provide.

Sources:
National Sample Survey Office (NSSO) reports, various academic studies, and expert analyses.