The unincorporated sector in India experienced substantial growth between October 2023 and September 2024, according to the Ministry of Statistics and Programme Implementation (MoSPI).
The sector saw a 12.84% increase in the number of establishments, a 10.01% rise in workforce, and a notable 16.52% jump in Gross Value Added (GVA) at current prices, compared to the same period in 2022-23.
The unincorporated sector, which consists of owner-operated businesses not registered as separate legal entities, remains a vital component of India’s economy.
In its annual survey, MoSPI highlighted that the total number of establishments in this sector grew from 65 million to 73.4 million during the survey period.
MoSPI’s survey also revealed that Maharashtra, Uttar Pradesh, and Gujarat led the country in terms of GVA during the 2023-24 period. These states were major contributors to the growth seen across the unincorporated non-agricultural sector.
Unincorporated Sector Sees Workforce Expansion & Female Participation
The unincorporated non-agricultural sector employed over 120 million workers during this period, marking an increase of more than 10 million workers from the previous year. The survey showed a steady rise in workforce participation, reflecting robust growth in the labor market.
Notably, the proportion of female workers in the sector increased from 25.63% in 2022-23 to 28.12% in 2023-24. The survey also highlighted that nearly 58% of establishments in the manufacturing sector were led by female proprietors during this period.
Unincorporated Sector Composition & Digital Adoption
The survey focused on unincorporated non-agricultural establishments, including MSMEs, household units, and own-account enterprises across manufacturing, trade, and services sectors. These businesses are primarily part of the informal sector.
One of the most significant findings of the survey was the growing trend of digital adoption. The use of the Internet for entrepreneurial purposes surged from 13.5% in 2022-23 to 17.9% in rural areas and from 30.2% to 37% in urban areas.
Overall, digital usage in the sector rose from 21.1% to 26.7%. Trading establishments saw a marked increase, with 35% using the Internet for business operations, up by 10 percentage points from the previous year.
Capital Investment & Loan Access Improve
The survey also indicated an uptick in capital investment within the unincorporated sector. The average value of fixed assets owned by establishments rose from Rs. 3,18,144 in 2022-23 to Rs. 3,24,075 in 2023-24.
Additionally, the outstanding loan per establishment increased from Rs. 50,138 in 2022-23 to Rs. 53,710, reflecting improved access to credit.
Survey Methodology & Data Collection
MoSPI collected data from a total of 498,024 establishments, with 273,085 located in rural areas and 224,939 in urban areas. The data was gathered from 16,842 first-stage units (FSUs), including both rural and urban regions.
With ongoing growth in the workforce, digital adoption, and capital investment, the unincorporated sector continues to play an essential role in India’s economic development, showing promising trends for the future.
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