The unincorporated sector — comprising millions of small and micro manufacturers, traders, and service providers — is the backbone of India's economy. While informal in structure, it is deeply formal in impact: generating livelihoods, fostering entrepreneurship, and contributing significantly to the country's GDP.
The National Statistics Office (NSO) recently released the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, covering the period from January to December 2025. This is the most comprehensive annual stocktaking of the sector, and the numbers tell a story of steady expansion, rising productivity, growing female participation, and accelerating digital adoption.
Key Points
· The unincorporated sector now comprises over 7.92 crore establishments — an 8% jump in a year.
· Employment crossed 12.81 crore workers, with more than 74.5 lakh new jobs added.
· Overall GVA of the sector grew by nearly 11% to Rs. 19.93 lakh crore.
· Internet usage for business purposes surged from 27% to 39% in a single year.
· Women now head 27% of all unincorporated establishments, and account for nearly 29% of the workforce.
Scale and Spread
Enterprises: The total number of unincorporated non-agricultural establishments grew from 7.34 crore in ASUSE 2023-24 to 7.92 crore in ASUSE 2025, a growth of approximately 8%. This expansion was broad-based: rural establishments grew by 6.71% (to 4.24 crore) and urban establishments grew at a faster 9.45% (to 3.68 crore).
Of these, 6.86 crore are Own Account Establishments (OAEs) — units run by working owners, typically without hired labour — while 1.06 crore are Hired Worker Establishments (HWEs), each employing at least one paid worker.
Sectoral composition has remained largely stable. Other Services leads with 42.37% of all establishments, followed by Trade at 30.56% and Manufacturing at 27.07%.
Who Runs These Enterprises?
Ownership structure: Around 95% of all unincorporated establishments are proprietary — run by a single owner. This dominance of sole proprietorship holds across rural and urban areas and across all three broad sectors. Uttar Pradesh records the highest share of proprietary establishments among major states, at 99.2%.
Social profile: Other Backward Classes (OBC) own the largest share of proprietary and partnership establishments at 51%, followed by Others (30.7%), Scheduled Castes (13.3%), and Scheduled Tribes (4.7%).
Market orientation: Almost all (99.5%) informal establishments operate as market-oriented units — selling goods or services at economically meaningful prices — reinforcing the sector's integration into the mainstream economy.
Geographic concentration: Uttar Pradesh (13.8%), West Bengal (13.1%), and Maharashtra (8.29%) together account for about 35% of all unincorporated establishments. Together with Tamil Nadu, Bihar, Gujarat, Madhya Pradesh, and Rajasthan — each with a share of 5% or more — a handful of states dominate the sector's landscape.
Employment Generation
The unincorporated non-agricultural sector employed approximately 12.81 crore workers during January-December 2025, up from 12.06 crore in ASUSE 2023-24 — a growth of 6.2%, adding over 74.5 lakh jobs. Employment rose in both rural areas (from 5.61 crore to 6.00 crore, up 6.9%) and urban areas (from 6.45 crore to 6.80 crore, up 5.6%).
Other Services leads employment generation at 39.5% of the total workforce, followed by Trade (33.2%) and Manufacturing (27.3%). Within these broad categories:
· In manufacturing, wearing apparel (31.8%), food products (13%), and textiles (12.9%) are the top three employers, together accounting for nearly 58% of manufacturing jobs.
· In trade, other retail trade overwhelmingly dominates with 82.9% of all trade-sector employment.
· In services, social and personal activities (24.1%), food and accommodation (17.4%), and land transport (16.2%) are the top three job-generating activities.
Emoluments: Average annual emoluments per hired worker stood at Rs. 1,46,550 in 2025, up about 4% over the previous survey. Urban hired workers earned more (Rs. 1,56,143) than their rural counterparts (Rs. 1,24,516). Among broad sectors, 'other services' offered the highest pay. Uttarakhand topped the chart among major states with average emoluments of Rs. 2,14,237 per hired worker, followed by Kerala (Rs. 1,98,204) and Telangana (Rs. 1,90,390).
Female Participation
Women's engagement in the unincorporated sector is on an upward trajectory, both as entrepreneurs and workers.
As entrepreneurs: About 27% of all unincorporated establishments are headed by female proprietors. This is particularly striking in manufacturing, where more than 60% of proprietary establishments are female-headed — a share that rose 2% from the previous survey. Telangana leads with 38.55% of its establishments headed by women (and a remarkable 80.45% in manufacturing). Gujarat and West Bengal also report high female entrepreneurship.
As workers: Female workers make up 28.71% of the total workforce in the unincorporated non-agricultural sector during ASUSE 2025, slightly up from 28.12% in the prior survey. Women constitute 34.24% of the OAE workforce and 18.72% of the HWE workforce. In manufacturing alone, women account for 48.3% of workers.
Multiplier effect: Female-led hired-worker establishments show a strong tendency to employ other women — nearly 72% of such establishments engaged at least one female hired worker. This signals a virtuous cycle where women in leadership create opportunities for other women.
Digitization and Formalization
Registration: 37.5% of unincorporated establishments are now registered under some act or authority, a marginal improvement from 37.2% in ASUSE 2023-24. Among sectors, services lead (47.8%), followed by trade (41.8%) and manufacturing (16.4%).
Bank accounts: Financial inclusion in the sector has strengthened significantly. The percentage of establishments maintaining accounts with financial institutions rose from 76.1% in ASUSE 2023-24 to 82.5% in ASUSE 2025. About 94% of HWEs maintain a bank or post office account.
Internet use: This is where the leap stands out. Internet usage for entrepreneurial purposes jumped from 27% to 39% overall in a single survey cycle — a gain of 12 percentage points. In rural areas, the rise was from 18% to 31% (13 points); in urban areas, from 37% to 49% (12 points). Among hired-worker establishments, 72.7% now use the internet for business. Delhi, Haryana, and Assam recorded the highest digital adoption rates among major states.
Productivity — GVA and Fixed Assets
Overall GVA: The total Gross Value Added (GVA) of the unincorporated non-agricultural sector grew by about 11% to Rs. 19.93 lakh crore in 2025 (from Rs. 17.97 lakh crore in ASUSE 2023-24). Rural GVA grew 11.86% and urban GVA grew 10.32%.
GVA per establishment: The average annual GVA per establishment has risen to Rs. 2,52,699 (up from Rs. 2,45,687), reflecting a 2.85% improvement in establishment-level productivity. HWEs are far more productive — averaging Rs. 10 lakh per establishment versus Rs. 1.40 lakh for OAEs. Delhi, Haryana, and Tamil Nadu lead states in GVA per establishment. Among the top GVA contributors at the national level are Uttar Pradesh (11.74%), Maharashtra (11.22%), and Tamil Nadu (8.20%).
GVA per worker: The sector-wide average is Rs. 1.6 lakh per worker. OAEs average Rs. 1.2 lakh per worker; HWEs average Rs. 2.3 lakh per worker.
Capital investment: Fixed assets per establishment rose to Rs. 3.4 lakh (from Rs. 3.2 lakh in ASUSE 2023-24), indicating better capitalization of the sector. Outstanding loan per establishment stood at Rs. 42,776 at the all-India level, with about 80% of borrowing channeled through institutional sources.
Rural vs Urban
Rural establishments at 4.24 crore represent 53.5% of the total. Rural employment — at 6.00 crore — has grown meaningfully, reflecting an expansion of non-farm livelihoods. Most rural establishments (44.7%) operate within household premises, while urban establishments are more likely to have fixed premises outside the home.
The urban sector is where scalable, hired-worker activity concentrates: 75 lakh of the 1.06 crore HWEs are located in urban areas. Urban establishments also show higher formalization and digital adoption.
…more on this tomorrow
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