‘Note ban, GST, COVID shocks cost Rs.11.3 lakh cr., 1.6 crore informal sector jobs’
The economic loss, particularly to India’s informal sector owing to the cumulative impact of macroeconomic shocks since 2016, including the demonetisation of high-value currency notes, the rollout of the Goods and Services Tax (GST) and the COVID-19 pandemic, is estimated at 4.3% of India’s GDP in 2022-23 or Rs. 11.3 lakh crore, India Ratings and Research said on Tuesday.
Noting that the sector was “severely impacted” by recent macroeconomic shocks, India Ratings’ principal economist Sunil Kumar Sinha estimated that 63 lakh informal enterprises shut down between 2015-16 and 2022-23, with about 1.6 crore jobs lost. “This period also coincided with the rise in the formalisation of the economy, which has led to robust tax collections. While formalisation of the economy is the way forward, the reduced unorganised sector footprint has implications for employment generation,” Mr. Sinha said.
In 2022-23, the Gross-Value Added (GVA) in the economy by such unincorporated enterprises was still 1.6% below 2015-16 levels. Moreover, their compounded annual growth rate (CAGR) was 7.4% between 2010-11 and 2015-16, but slipped into a 0.2% contraction since then, the rating firm reckoned based on the recently released findings of the government’s Annual Survey of Unincorporated Sector Enterprises (ASUSE).
