On 27 July 2026, the Ministry of Statistics & Programme Implementation (MoSPI) highlighted the surveys it uses to measure the unincorporated (informal) sector of the economy — including the Annual Survey of Unincorporated Sector Enterprises (ASUSE). The informal economy employs the vast majority of Indian workers, so understanding and measuring it is vital. For a CDS/OTA aspirant, the informal/unorganised sector is a core economy topic — reliably examined for its size, characteristics, and formalisation.
The news in one frame
The essentials:
- What: MoSPI's surveys of the unincorporated (informal) sector, chiefly the ASUSE.
- What ASUSE measures: unincorporated non-agricultural enterprises (manufacturing, trade, services).
- Why it matters: the informal sector employs most of India's workforce.
- Key paradox: it employs many but contributes a relatively small share of GDP (low productivity).
What is the informal (unorganised) sector?
Start with the concept. India's economy has two broad parts:
- The formal (organised) sector — registered firms with formal contracts, regular wages, social security and record-keeping (large companies, government, registered factories).
- The informal (unorganised) sector — small, unregistered units and self-employed workers with no formal contracts, little job security or social protection — e.g., street vendors, small shops, artisans, home-based workers, casual labourers, small workshops.
Crucially, the vast majority of India's workforce (over 80%) is in the informal sector. An "unincorporated" enterprise is one not registered as a company — typically a proprietorship or partnership run by an individual or family. This economy topic is exactly what the CDS/OTA notes on the economy build.
The ASUSE and how the sector is measured
The examinable specifics:
- The Annual Survey of Unincorporated Sector Enterprises (ASUSE), run by MoSPI, is the official survey of the unincorporated non-agricultural sector — covering manufacturing, trade and other services (excluding construction).
- It captures data on the number of establishments, employment, wages, output and productivity.
- A striking finding: the unincorporated non-farm sector employs a large share of non-farm workers (~19%) but contributes only a small share of GDP (~6%) — showing its low productivity and tiny unit size.
- (For the formal services sector, MoSPI is also building the Index of Services Production (ISP) from GST data.)
So surveys like ASUSE make the "invisible" informal economy visible for policy. These themes recur in the CDS/OTA daily current affairs.
Why the informal sector matters — and its challenges
The examinable analysis:
- Employment: it is the largest employer, absorbing workers agriculture and the formal sector cannot.
- Vulnerability: informal workers lack job security, minimum wages, pensions and health cover — exposed to shocks (as seen during Covid).
- Low productivity: tiny, under-capitalised units mean low output per worker and limited growth.
- Revenue & data gaps: being unregistered, they are outside the tax net and hard to reach with welfare.
The revision hook: informal/unorganised sector = small, unregistered units + self-employed, no formal contracts/social security; over 80% of India's workforce; "unincorporated" = not a registered company; ASUSE (MoSPI) measures the unincorporated non-farm sector — it employs many (~19% of non-farm workers) but adds little GDP (~6%) = low productivity.
Formalisation — bringing workers into the fold
Round out with the formalisation drive the exam pairs with this:
- e-Shram portal — a national database to register unorganised workers and extend benefits.
- Udyam registration — simple online registration for MSMEs (micro, small and medium enterprises).
- GST — bringing more businesses into the formal tax system.
- Social security: the Code on Social Security, 2020 aims to extend benefits to gig, platform and unorganised workers; schemes like PM-SVANidhi (street vendors) and Jan Dhan/DBT aid inclusion.
- Financial inclusion and digital payments (UPI) help small units join the formal economy.
Where the informal sector fits — sectors and MSMEs
A little more depth the exam rewards:
- Three economic sectors: primary (agriculture, mining), secondary (manufacturing), tertiary (services). The informal sector spans all three, but ASUSE covers the non-farm part.
- MSMEs (Micro, Small & Medium Enterprises) — many are informal; they contribute about 30% of GDP and are huge job creators, supported by the Ministry of MSME (Udyam registration, credit-guarantee schemes).
- Organised vs unorganised employment: the PLFS (Periodic Labour Force Survey) tracks the workforce; most Indian workers are self-employed or casual — hallmarks of informality.
- Gig and platform workers — a new, fast-growing informal category (delivery, ride-hailing) now recognised under the Code on Social Security, 2020.
A neat framing for answers: India's challenge is not creating jobs alone but creating productive, secure, formal jobs — moving workers from low-productivity informal units to higher-productivity formal ones, while protecting those who remain informal. Linking MSMEs, gig workers and formalisation rounds out a strong economy answer.
Why it matters
For the essay/interview and bigger picture:
- Livelihoods: the informal sector is the backbone of employment for the poor.
- Inclusive growth: raising its productivity and protection is key to equitable development.
- Data for policy: accurate measurement (ASUSE, PLFS) lets the government target support effectively.
Exam relevance in one paragraph
For CDS/OTA GK, retain: India's informal (unorganised) sector — small, unregistered units and self-employed workers without formal contracts or social security — employs over 80% of the workforce; an "unincorporated" enterprise is one not registered as a company; the Annual Survey of Unincorporated Sector Enterprises (ASUSE), conducted by MoSPI, measures the unincorporated non-agricultural sector (manufacturing, trade, services), which employs a large share of non-farm workers (~19%) but contributes only ~6% of GDP, reflecting low productivity; formalisation efforts include the e-Shram portal (unorganised workers), Udyam registration (MSMEs), GST, and the Code on Social Security, 2020. For the essay, frame it as making the informal economy visible, productive and protected.
🎯 Practice MCQs
Q1. The ASUSE is conducted by: (a) MoSPI (b) RBI (c) SEBI (d) NITI Aayog → (a) — the Ministry of Statistics & Programme Implementation.
Q2. ASUSE measures the ___ sector. (a) unincorporated (informal) non-agricultural (b) formal banking (c) agriculture only (d) government → (a) — the unincorporated non-farm sector.
Q3. An "unincorporated" enterprise is one that is: (a) not registered as a company (b) a large PSU (c) a bank (d) a government office → (a) — not incorporated as a company (proprietorship/partnership).
Q4. Roughly what share of India's workforce is in the informal sector? (a) over 80% (b) 10% (c) 25% (d) 50% → (a) — more than 80%.
Q5. The informal sector's paradox is that it employs many but contributes: (a) a relatively small share of GDP (b) all of GDP (c) nothing to employment (d) only exports → (a) — a small GDP share (low productivity).
Q6. The portal to register unorganised workers is: (a) e-Shram (b) Udyam (c) DigiLocker (d) CoWIN → (a) — the e-Shram portal.
Q7. MSMEs register online via: (a) Udyam (b) e-Shram (c) UPI (d) GeM → (a) — the Udyam portal.
Q8. Which is an example of informal-sector work? (a) a street vendor (b) a bank clerk (c) an IAS officer (d) a PSU engineer → (a) — a street vendor.
Q9. The law extending social security to gig/unorganised workers is the: (a) Code on Social Security, 2020 (b) Companies Act (c) RTI Act (d) IPC → (a) — the Code on Social Security, 2020.
Q10. Informal workers are vulnerable mainly because they lack: (a) job security and social protection (b) mobile phones (c) any skills (d) demand → (a) — security, minimum wages, pensions and health cover.
Q11. The scheme for street vendors' micro-credit is: (a) PM-SVANidhi (b) PM-KISAN (c) FAME (d) Ujjwala → (a) — PM-SVANidhi.
Q12. "Formalisation" of the economy means bringing units into: (a) the registered, tax-and-benefit system (b) the informal sector (c) agriculture (d) exports only → (a) — the formal system.
Q13. The formal-sector services production index MoSPI is building is the: (a) Index of Services Production (ISP) (b) WPI (c) Sensex (d) CPI → (a) — the ISP.
Q14. Low productivity in the informal sector is mainly due to: (a) tiny, under-capitalised units (b) too much technology (c) high wages (d) large size → (a) — small, low-investment units.
Q15. Accurate measurement of the informal economy helps the government to: (a) target welfare and policy (b) raise cricket scores (c) launch satellites (d) build dams → (a) — plan and target support.
📋 How this gets asked (PYQ pattern)
The informal economy is a reliable CDS/OTA economy set. The reliable framings are formal vs informal (organised vs unorganised), the employment-vs-GDP paradox, ASUSE (MoSPI), and formalisation tools (e-Shram, Udyam, GST). A common trap says the informal sector contributes the majority of GDP (it employs most but adds a small GDP share). The fresh 2026 hook is the ASUSE/informal-sector surveys — ideal for "which survey / which agency / which share" items. We reference the pattern, not any exact past question.
Preparing for CDS or OTA? The informal economy, employment and formalisation are high-yield economy topics and strong essay material on inclusive growth. Follow our daily CDS/OTA current affairs and train with serving-officer faculty in the upcoming Cavalier courses in Delhi.
✍️ Written by Aditya Tiwari — Economy & current-affairs faculty at The Cavalier. Reviewed by the Cavalier Faculty Desk. The Cavalier, founded by ex-Army officers, has trained NDA/CDS/SSB aspirants since 2001 (Facebook · YouTube).
Source: PIB / MoSPI, 27 July 2026. Facts cross-verified with independent sources.