India’s unincorporated non-agricultural sector has crossed a historic milestone, recording over 13 crore employed workers for the first time in the January–March quarter of 2025, according to the Ministry of Statistics and Programme Implementation (MoSPI). The surge, captured in the newly launched Quarterly Bulletin of Unincorporated Sector Enterprises (QBUSE), reflects a dynamic shift in India’s informal economy, driven by growth in trade, services, and self-employment.
While employment dipped slightly to 12.86 crore in the April–June quarter, both figures remain significantly higher than the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023–24 estimate of just over 12 crore workers. The data signals a structural transformation in India’s informal sector, which continues to be a vital engine of job creation and economic resilience.
🧭 Key Employment Metrics in India’s Unincorporated Sector
| Indicator | Jan–Mar 2025 | Apr–Jun 2025 | Change (%) |
|---|---|---|---|
| Total Employment | 13.13 crore | 12.86 crore | –2.1% |
| Female Workforce Share | 28.1% | 28.3% | +0.2% |
| Total Establishments | 7.85 crore | 7.94 crore | +1.1% |
| Trade Segment Growth | — | +3.63% | — |
| Services Segment Growth | — | +3.13% | — |
The April–June quarter saw a slight decline in employment due to reduced hiring and a slowdown in manufacturing, but the overall trajectory remains upward compared to previous annual benchmarks.
🔍 What’s Driving the Employment Surge?
The record-breaking employment figures are attributed to several converging factors:
1. Expansion in Trade and Services
The trade segment grew by 3.63% and services by 3.13% in Q2 2025, contributing significantly to the rise in establishments and employment. These sectors are less capital-intensive and more adaptable to informal setups, making them ideal for rapid job creation.
2. Rise in Self-Employment
The share of working owners increased from 58.29% in Q1 to 60.18% in Q2, indicating a shift toward self-employment and entrepreneurial ventures. This trend was most pronounced in manufacturing, where owner-operated units replaced hired labor.
3. Rural Economic Activity
Rural employment rose from 5.97 crore to 6.25 crore, underscoring the growing role of unincorporated enterprises in rural India. This reflects increased participation in local trade, services, and small-scale manufacturing.
4. Digital Integration
Internet usage among unincorporated enterprises rose to 36.03% in Q2 from 34.20% in Q1, signaling gradual digital adoption. This enables better market access, financial inclusion, and operational efficiency.
📉 Sector-Wise Employment Trends
| Sector | Employment Share (Q1 2025) | Employment Share (Q2 2025) | Change (%) |
|---|---|---|---|
| Manufacturing | 28.1% | 25.9% | –2.2% |
| Trade | 41.3% | 42.7% | +1.4% |
| Services | 30.6% | 31.4% | +0.8% |
The decline in manufacturing employment was offset by gains in trade and services, which now account for nearly three-fourths of total informal sector jobs.
🔥 Gender-Inclusive Growth and Entrepreneurship
Women accounted for over 28% of the workforce in both quarters, a slight improvement over previous years. This highlights the sector’s role in fostering gender-inclusive growth, particularly in services and retail. The rise in female entrepreneurship is also linked to increased digital access and government schemes promoting self-employment.
| Gender Metric | Jan–Mar 2025 | Apr–Jun 2025 | Change (%) |
|---|---|---|---|
| Female Workforce Share | 28.1% | 28.3% | +0.2% |
| Women-Owned Units | 1.9 crore | 2.0 crore | +5.3% |
🧠 Expert Commentary and Policy Implications
| Expert Name | Role | Comment |
|---|---|---|
| Meera Iyer | Labor Economist | “The rise in self-employment reflects both opportunity and necessity.” |
| Rajiv Bansal | MSME Policy Advisor | “Trade and services are absorbing displaced labor from manufacturing.” |
| Dr. Rakesh Sinha | Rural Development Analyst | “Digital adoption is transforming informal enterprises in rural India.” |
Experts agree that while the employment surge is encouraging, it also points to structural shifts that require targeted policy support—especially for manufacturing and skill development.
📦 Challenges and Opportunities Ahead
Despite the positive trends, the unincorporated sector faces several challenges:
- Limited Access to Credit: Many enterprises remain outside formal banking systems.
- Low Productivity: Informal setups often lack scale and technology.
- Regulatory Ambiguity: Compliance burdens deter formalization.
- Skill Gaps: Workers need training to transition to higher-value roles.
However, the sector also offers immense opportunities for inclusive growth, especially if supported by digital tools, financial inclusion, and simplified regulations.
📌 Conclusion
India’s unincorporated sector has emerged as a powerful engine of employment, crossing the 13 crore mark for the first time in Q1 2025. Driven by trade, services, and self-employment, the sector reflects both resilience and transformation in India’s informal economy. As digital adoption rises and rural participation expands, the unincorporated sector is poised to play a pivotal role in shaping India’s employment landscape. Strategic policy support and ecosystem development will be key to sustaining this momentum and unlocking its full potential.
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Disclaimer: This article is based on publicly available government data and media reports as of September 4, 2025. It is intended for informational purposes only and does not constitute economic, financial, or policy advice.
