Informal entities saw post-pandemic rise in internet consumption: NSO

Over 20% enterprises used net for entrepreneurial purposes

More than one in five enterprises within the expansive unorganised sector used the internet for entrepreneurial activities, such as taking orders or conducting transactions, during the October 2022-September 2023 period, revealed the latest Annual Survey of Unincorporated Sector Enterprises (ASUSE), by the National Statistical Office (NSO).

The share of establishments leveraging the internet for these purposes, at the national level, rose to 21.1 per cent during the period under review, up from 13.9 per cent between April 2021 and March 2022, suggesting a significant post-pandemic surge.

“This shows an improved use of information technology (IT) and digital platforms, and also indicates a fast rate of digitisation taking place in the sector,” the NSO stated. 

The data further revealed the proportion of unincorporated enterprises using the internet in rural areas increased to 13.5 per cent from 7.7 per cent, while their urban counterparts saw a rise to 30.2 per cent, from 21.6 per cent during the same timeframe.

Pronab Sen, chairperson of the Standing Committee on Statistics, observed that post-pandemic digitisation has notably accelerated among small businesses. “Small establishments in the vast unorganised/informal sector are increasingly adopting digital technologies as a way to expand their businesses. The use of digital payments has become quite widespread now,” he noted.

The unincorporated sector holds particular significance in India due to the sheer number of establishments it encompasses and the substantial employment it provides to a diverse range of workers — unskilled, semi-skilled, and skilled — besides its contribution to the country’s gross domestic product. These enterprises typically consist of small businesses, vendors, hawkers, sole proprietorships, partnerships, and other entities not incorporated under the Companies Act of 1956 or 2013.

The ASUSE report also highlighted a positive shift in capital investment. The average fixed assets owned by an unincorporated non-agricultural establishment rose to Rs 3,18,144 during October 2022-September 2023, from Rs 2,81,013 in April 2021-March 2022. Concurrently, outstanding loans per establishment increased from Rs 37,408 to Rs 50,138, indicating improved loan availability within the sector.

Additionally, the share of registered establishments climbed to 36.8 per cent during the period under review, up from 29.4 per cent, reflecting a growing trend toward formal registration. Registration differs from incorporation, as it involves getting establishments registered under various acts or authorities, such as goods and services tax (GST) or income tax.

In June, the NSO had released a preliminary factsheet from the survey, revealing that the total number of establishments in the unincorporated sector had grown to 65 million in October 2022-September 2023, from 59.7 million in April 2021-March 2022. Among the broad sectors covered, “other services” comprised the largest share at 37.88 per cent, followed by “trade” at 34.71 per cent, and “manufacturing” at 27.41 per cent.