By Dr. Gyan Pathak
Labour market complexity in India is worsening. The quarterly bulletin of unincorporated non-agricultural sector enterprises for April-June 2025, that is the Quarter 1 of the current financial year 2025-26, has just revealed that the number of establishment rose by 1.1 per cent compared to January-March 2025 but number of employment fell by 2.1 per cent. Not only that, percentage of unpaid workers are rose, while hired workers declined.
The bulletin is part of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025 conducted by National Statistics Office (NSO). In common parlance unincorporated establishments are those which are not registered under Companies Act as separate legal entities from their owners.
The Survey found that number of establishments rose from 7,85,36 in January-March 2025 to 7,94,240 in April-June 2025. According to the annual data from October 2023-September 2024, there were 7,33,995 establishment. It shows that number of establishments in the unincorporated non-agriculture sector is on the rise.
Number of establishments in the rural areas have been rising more than in the urban areas. During April-June 2025 there were 4,27,623 establishments in the rural areas as against 3,66,617 establishment in urban areas. Number of establishments in urban areas declined from 3,75,509 in January-March 2025 to 3,66,617 in April-June 2025 while it rose from 4,09,858 to 4,27,623 in urban areas during this period.
The number of workers fell from 13,13,380 in January – March 2025 to 12,85,725 in April-June 2025. Number of workers in urban areas fell from 7,16,420 to 6,61,148 while it rose in the rural areas from 5,96,959 to 6,24,577. It shows that both the number of enterprises and workers are rising in the rural areas.
Percentage of proprietory and partnership establishments during the quarters under consideration remained almost stagnant at 95.31 per cent during April-June as against 95.39 per cent in January – March 2025. What is more concerning is that the percentage of hired worker establishments declined from 14.04 per cent to 13.25 per cent. Percentage of market establishments remained almost stagnant at 99.50 per cent as against 99.55 per cent in January – March 2025.
Among the workers employed in the unincorporated sector, a disturbing trend has been observed. Comparison between the two quarters shows that percentage of working owners have risen from 58-29 per cent to 60.18 per cent. Percentage of hired workers declined from 26.86 per cent to 24.38 per cent while others including unpaid family members rose from 14.85 per cent to 15.44 per cent.
The sharp fall in employment during April-June 2025 compared to January-March 2025 shows the continued volatility in the labour market. It indicates that people are hired when there are demand and fired when demand subsides. There is no employment security in the sector, and there is no social security too.
The survey shows that working owners in manufacturing rose from 59.18 per cent in January-March 2025 to 62.13 per cent in April-June 2025. During this period working owners in Trade rose from 55.64 per cent to 57.49, while in Service sector their percentage rose from 59.94 per cent to 61.22 per cent.
During this period hired workers in manufacturing declined from 27.09 per cent to 23.91 per cent, in trade from 21.96 to 18.99 per cent, and in Service sector from 30.95 to 29.35 per cent. Other workers percentage during this period including unpaid family members rose in all the three sectors, which shows how the working people are under duress.
Other Services’ sector accounts for the largest share of both establishments and workers in both quarters, followed by Trade and Manufacturing. In both quarters, Trading units accounted for the largest proportion of establishments employing hired workers.
Proprietary and partnership firms continued to dominate, comprising nearly 100% in Manufacturing and Trade, and around 89% in Other Services, with negligible change between quarters. ‘Other Services’ consistently records the highest share of hired workers, while also leading in the share of working owners reflecting its dual nature of employment and entrepreneurship.
During the two quarters under consideration, female workers accounted for over 28 per cent of total employment.
Trend of Digitization in the Unincorporated Sector has been marked by the growing use of Internet among the business units which has gone up from34% during January, 2025-March, 2025 to 36% during April, 2025-June, 2025.
Percentage of establishments registered under at least one act/authority has been observed to be 36% in January, 2025-March, 2025 and 35% during April, 2025-June, 2025. (IPA Service)
