Can GVA Estimates of Annual Survey of Unincorporated Sector Enterprises (Asuse) be Used Directly for Compilation of Annual National Accounts?

The paper examines whether the activity-group-level gross value added (GVA) estimates from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) can be used directly for compiling India’s Annual National Accounts. It highlights recent advancements in Indian economic statistics, such as the use of Annual Report of Companies data from the Ministry of Company Affairs (MCA) and the Annual Survey of Industries (ASI) for the organised sector, and the introduction of annual surveys like the Periodic Labour Force Survey (PLFS) and ASUSE for the unorganised sector. While ASUSE is designed to provide data on the unorganised non-agricultural sector, including GVA and employment, the paper identifies significant discrepancies between ASUSE and PLFS employment estimates, attributing these two issues like under-reporting of casual workers and freelancers. These discrepancies would lead to potential underestimation of activity-group-level GVAs, if ASUSE data are used directly without adjustments, making them unsuitable for national accounts. Whereas, using the Labour Input Method (LIM), Effective Labour Input Method (ELIM) applying ASUSE-based estimates of gross value added per worker (GVAPW) may lead to overestimation, as the latter are likely to be biased upward. The analysis includes comparisons of employment data across sectors for 2021-2022 and 2022-2023, underscoring the challenges in aligning establishment and household survey results.