Recent Developments:
- The Ministry of Statistics and Programme Implementation (MoSPI) has released, for the first time, district-level insights on the unincorporated non-agricultural sector using data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, covering January–December 2025. The release provides granular evidence on employment, women’s participation, enterprise ownership, remuneration and geographical concentration.
- ASUSE 2025 estimates that India’s unincorporated non-agricultural sector had about 7.92 crore establishments and employed around 12.81 crore workers, while its Gross Value Added (GVA) increased by 10.87% in current prices over ASUSE 2023–24.
- The district-level analysis covers 757 districts, although geographical coverage may vary because of administrative changes, including the creation of new districts and changes in boundaries.
Understanding the Informal Economy:
Scope and Characteristics:
- The unincorporated non-agricultural sector broadly covers enterprises engaged in manufacturing, trade and other services that are not incorporated as companies or other formal entities; ASUSE excludes agriculture and construction and is a sample survey rather than a census of all enterprises.
- The sector is economically important because it provides employment and livelihoods through small businesses, self-employment, household enterprises and informal hired work, but workers and enterprises may have limited access to formal finance, technology, social security and institutional support.
- ASUSE 2025 recorded substantial expansion in the sector, with establishments rising from 7.34 crore in ASUSE 2023–24 to 7.92 crore in 2025, while employment increased by more than 74.5 lakh workers.
Why District-Level Data Matters:
- National and State-level averages can conceal substantial geographical variation; district-level statistics allow governments to identify local labour-market patterns, gender gaps, enterprise clusters and development constraints.
- Such granular evidence can strengthen evidence-based policymaking, outcome monitoring and targeted interventions instead of applying uniform policies to districts with very different economic structures.
Women’s Participation in Informal Work:
Geographical Variation:
- Women constituted about 29% of the total workforce in the unincorporated non-agricultural sector in ASUSE 2025, showing a significant but uneven presence of women in informal economic activity.
- The district-level estimates reveal a sharp geographical divide, with Nirmal, Telangana recording the highest female share at around 78%, followed by Imphal East and Nizamabad at around 70%, Jagtial at 69% and Bishnupur at 66%.
- At the lower end, Rudraprayag recorded only around 7% female participation, while Srinagar, Hathras and Banaskantha recorded around 11% each and Marigaon around 9%.
- The concentration of high female participation across eastern and northeastern districts indicates the importance of regional socio-economic structures, occupational patterns, household enterprises and local production systems.
Participation versus Quality of Employment:
- High female participation does not automatically imply high-quality employment because participation must be assessed alongside earnings, productivity, working conditions, social protection and access to economic opportunities.
- Among districts where women constituted at least half of the informal workforce, South West Khasi Hills, Meghalaya, recorded the highest annual emoluments per hired worker at around ₹1.71 lakh, compared with an all-India average of roughly ₹1.3 lakh.
- Therefore, policy must move beyond increasing women’s participation towards ensuring productive, remunerative and secure employment.
Women’s Enterprise Ownership:
From Workers to Entrepreneurs:
- ASUSE 2025 also indicates a close relationship between female workforce participation and female ownership of proprietary establishments.
- Nirmal, which recorded the highest female workforce participation, also had nearly 80% of proprietary establishments owned by women, demonstrating that women’s economic participation can extend from wage work to entrepreneurship and enterprise ownership.
- At the national level, the share of female-headed proprietary establishments increased from 26.17% in ASUSE 2023–24 to 26.93% in ASUSE 2025, while nearly 72% of female-led establishments employing workers engaged at least one female hired worker.
- This highlights the potential of women-led enterprises as employment multipliers, particularly when supported through credit, skilling, technology and market access.
Spatial Concentration of Informal Economic Activity:
Workforce and Establishment Concentration:
- The geography of informal economic activity changes significantly when measured by the absolute number of workers and establishments rather than the proportion of women workers.
- North 24 Parganas, West Bengal, recorded the largest informal workforce, with approximately 21.3 lakh workers and 16.6 lakh establishments, demonstrating the scale of informal activity in densely populated economic regions.
- The top 10 districts by establishments account for around 11% of the sector’s GVA, while the top 50 districts contribute almost one-third, indicating considerable spatial concentration of economic value.
- Thus, high female participation is concentrated in particular regions, whereas the largest absolute scale of informal activity is distributed across major population and economic centres.
Major Challenges Associated with Informal Employment:
Low Formalisation and Social Protection:
- Informal workers frequently operate without stable employment contracts, employer-provided social security or adequate institutional protection, making them vulnerable to income shocks, illness, unemployment and economic disruptions.
- NITI Aayog’s recent analysis highlights the persistence of informality across India’s employment structure and stresses the need to expand social protection, formalisation and access to better-quality employment.
- The Code on Social Security, 2020 seeks to extend social-security protection to workers across organised, unorganised and other sectors and specifically provides a framework covering unorganised workers, gig workers and platform workers.
Productivity and Technology Gaps:
- Small informal enterprises often face constraints related to credit, digitalisation, technology adoption, managerial capabilities, formal skills and market access, which can restrict productivity and income growth.
- Formalisation should therefore not mean merely increasing regulatory compliance; it should improve access to finance, technology, infrastructure, markets and social protection.
Policy Significance:
Women-Led Development:
- High female participation and ownership in several districts demonstrate that the informal economy can become an important platform for women-led development, provided participation translates into higher productivity, income and decision-making power.
- Policies should integrate credit, skilling, digital financial services, childcare support, safe mobility, market linkages and social security to reduce barriers to women’s economic participation.
District-Centric Development:
- The wide inter-district variations revealed by ASUSE 2025 support a place-based policy approach in which interventions are designed according to local occupational structures, enterprise density, gender participation and productivity levels.
- District-level data can help governments identify locations requiring focused intervention in women’s employment, entrepreneurship, skill development, credit access and social protection.
Formalisation with Inclusion:
- Formalisation should be pursued through a combination of digital registration, financial inclusion, simplified compliance, enterprise support and portable social protection, rather than through enforcement alone.
- Platforms such as e-Shram, along with schemes supporting street vendors, artisans and micro-enterprises, can be integrated with district-level data to improve targeting and delivery.
Way Forward:
Building a Productive Informal Economy:
- Improve access to institutional credit, digital payments, technology, infrastructure and organised markets for informal enterprises.
- Promote district-specific enterprise and skill clusters based on local comparative advantages, especially in manufacturing, food processing, textiles, handicrafts, retail and services.
Strengthening Women’s Economic Agency:
- Expand targeted financial and entrepreneurial support for women-owned proprietary establishments, while improving childcare, mobility, skilling and digital access.
- Measure women’s employment not merely through participation rates but through earnings, productivity, ownership, working conditions and social-security coverage.
Improving Statistical Capacity:
- Integrate ASUSE, Periodic Labour Force Survey (PLFS) and administrative datasets wherever methodologically appropriate to create a more comprehensive picture of informal employment.
- Regular district-level statistics can support cooperative and competitive federalism, evidence-based budgeting and outcome-oriented governance.
Conclusion:
- The first district-level ASUSE 2025 insights demonstrate that India’s informal economy is large, diverse, gendered and geographically uneven.
- The findings reveal a crucial policy distinction: increasing women’s participation is necessary but insufficient unless it is accompanied by better remuneration, productivity, enterprise ownership and social protection.
- Granular statistics can therefore help India move from broad estimates to targeted, outcome-based interventions, strengthening inclusive growth and advancing the objective of women-led development.
Value Addition for UPSC:
Key Concepts:
- Informal Economy: Economic activity characterised by limited formal regulation, registration, employment protection or social-security coverage.
- Unincorporated Enterprise: An enterprise that is not incorporated as a separate legal corporate entity.
- ASUSE: Annual statistical survey of unincorporated non-agricultural enterprises conducted by MoSPI.
- Place-Based Policy: Policy design that accounts for the specific economic, social and geographical characteristics of different regions.
