MoSPI Hosts Consultation on Estimating Informal Sector’s Contribution to GDP Amid Base Year Revision
The discussion focused on improving the methodology for estimating the informal sector’s contribution and integrating new data sources into the revised GDP series.
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- Country:
- India
The National Accounts Division of the Ministry of Statistics and Programme Implementation (MoSPI) organized a half-day consultation on ‘Estimation of Informal Sector in Gross Domestic Product (GDP)’ on January 30, 2025, at Tagore Chamber, SCOPE Convention Centre, New Delhi.
This consultation was part of MoSPI’s ongoing efforts to revise the base year of GDP from 2011-12 to 2022-23. The discussion focused on improving the methodology for estimating the informal sector’s contribution and integrating new data sources into the revised GDP series.
Significance of the Informal Sector in GDP
According to National Accounts Statistics, the informal sector contributed approximately 45% to the total GDP in FY 2022-23. From a labor perspective, 61% of women workers in the non-agriculture sector were employed in informal sector enterprises, as per the Periodic Labour Force Survey (PLFS) 2023-24.
Keynote Address: Impact of Digital Penetration on Informal Economy
The consultation’s inaugural session was addressed by Shri Sanjeev Sanyal, Member of the PM Economic Advisory Council, who highlighted the changing nature of informality in the economy due to digital penetration across various sectors.
He cited the rise of:
UPI payments
Gig workers
Social media influencers
Self-employment through digital platforms
Professions such as online yoga teaching
Sanyal emphasized that these evolving forms of economic transactions need to be effectively captured in GDP estimation.
MoSPI’s Efforts to Strengthen Informal Economy Estimates
Dr. Saurabh Garg, Secretary, MoSPI, stressed the importance of accurately estimating the informal sector’s contribution and outlined ongoing initiatives within the Ministry:
Enhanced use of administrative data sources like GST records and digital payment systems
Development of a Statistical Business Register for comprehensive data collection
Monthly employment statistics from PLFS, starting January 2025
Quarterly estimates for informal sector contributions through unincorporated enterprise surveys
He urged various government ministries and departments to leverage their administrative databases to complement survey-based GDP estimates and actively participate in MoSPI’s consultative exercises.
Government Interventions Addressing Informality
MoSPI also highlighted several government policy initiatives aimed at formalizing the workforce and providing social protection:
7 crore people transitioned to secure, formal jobs over the past 7 years as per EPFO data
Social Protection coverage in India doubled from 24.4% to 48.8% (ILO’s World Social Protection Report 2024-26)
e-Shram Portal provides welfare scheme access to over 300 million unorganized sector workers
Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) launched in 2019 for pension benefits to unorganized workers
Total enrolments under Atal Pension Yojana crossed 7 crore as of October 2024
Technical Sessions on Informal Sector Estimation
The consultation featured detailed technical discussions on data sources and methodologies used in compiling Gross Value Added (GVA) estimates for the informal sector.
Industries with high informality, such as:
Agriculture & Allied Activities
Certain Manufacturing Sectors
Construction
Trade
Road Transport
Hotels & Restaurants
Personal Services
were analyzed for improved data integration.
Key insights from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) were also shared. Since its launch in 2021-22, ASUSE has been a crucial tool for measuring productivity in the informal sector.
The Ministry of Textiles presented a case study showcasing the informal nature of the textile industry, along with available administrative and survey-based data sources.
Exploring Alternative Data Sources for Informal Sector Measurement
Participants from government ministries, research institutions, and industry associations supported MoSPI’s initiative to integrate survey data with administrative data sources.
Discussions explored new data sources, including:
PM SVANidhi (PM Street Vendor’s AtmaNirbhar Nidhi) for tracking street vendors’ economic activities
Pehchan Cards for artisans in the handicrafts sector
Worker databases from organizations like the Tea Board, Coffee Board, and State Construction Boards
District-level estimates from ASUSE
Capturing seasonal economic activities through specialized surveys
Assessing the digital economy’s impact via input-output frameworks
Tracking gig economy growth and social influencer contributions
Utilizing alternative data sources such as remote sensing and satellite data
Call for Research Collaboration
MoSPI invited research institutions, academia, and industry associations to conduct studies on alternate data sources and methodological enhancements. The Ministry emphasized that such discussions and collaborations are vital for achieving the vision of ‘Viksit Bharat’ through robust GDP estimation.
By adopting modern data integration techniques and improving informal sector measurement, MoSPI aims to enhance economic policymaking and ensure inclusive growth in India’s rapidly evolving economic landscape.
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