Employment in India’s unincorporated non-agricultural sector grew 6.6% in the April–June quarter (Q1) despite global uncertainties, with growth led by a 21% rise in services sector workforce, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday.
The informal sector employed 137 million workers in Q1, up from 129 million in the corresponding quarter a year ago. Employment in the informal sector was, however, down 9.7% from the previous quarter, results of the Quarterly Bulletin of Unincorporated Sector Enterprises (QBUSE) showed.
The sector plays a crucial role in expanding employment opportunities, promoting grassroots entrepreneurship, and contributing significantly to the country’s gross domestic product (GDP).
Employment growth in the first quarter of FY27 was however slower than the 15.5% rise seen in January-March, likely reflecting the impact of global uncertainties during the quarter.
The number of unincorporated establishments rose 9.2% year-on-year (y-o-y) in April-June to 86.73 million. This growth was driven by a 15.3% increase in the urban sector, while informal establishments in the rural sector rose just 3.9% in the June quarter.
According to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, the unincorporated sector had an estimated 79.2 million establishments and 128 million workers.
Sectoral Breakdown
“The other services sector recorded the highest growth among all sectors, with both establishments and employment increasing by over 21% y-o-y. This was followed by the manufacturing sector, which registered a growth of 10.06% in the estimated number of establishments and 6.60% in the estimated workforce,” MoSPI said in a release.
The percentage of workers hired on a fairly regular basis was estimated at 22.8% in April-June, down from 24.4% a year ago. Working owners continued to form the largest share of the workforce, accounting for 62.4% of total workers, up from 60.2% in the corresponding quarter of the previous year.
“The women workforce remained impressive, constituting more than 30% of total employment in the sector,” the ministry said. “The gradual increase in percentage share of female workers highlights the growing importance of the sector in generating employment opportunities for women and promoting inclusive economic participation.”
Digital Adoption
Around 82% of establishments in the informal sector used the internet for entrepreneurial purposes in April-June, the ministry said. “Further, nearly 80% of establishments have adopted cashless modes of transaction.”
The percentage of firms reporting some form of registration was estimated to be 42.5% in April-June, up 7 percentage point from a year ago. This indicates an increasing trend in integration of enterprises with regulatory mechanisms, the ministry said.