Growth of Unregistered Establishments in India

Summary of Key Facts and Data on the Informal Sector in India (January-March 2026)

Economic Indicators:

• Number of Informal Establishments: Estimated at 9.16 crore, reflecting a 16.69% increase compared to the same quarter last year (7.85 crore).
• Employment in Informal Sector: Surpassed 15 crore for the first time, indicating a 15.51% annual growth in employment.
• Contribution of Rural Areas: Rural sector contributed significantly with 20.46% growth in the number of informal establishments, while urban areas saw 12.59% growth.

Workforce Trends:

• Ownership Structure: 60.97% of the workforce in informal establishments are owners, up from 58.29% last year; rental workers decreased from 26.86% to 24.77%.
• Female Workforce Participation: Women constitute about 29% of total employment in the informal sector, highlighting the sector's role in generating employment opportunities for women.

Digitalization and Formalization:

• Internet Usage: Approximately 81% of informal establishments utilized the internet for entrepreneurial purposes.
• Cashless Transactions: Around 81% of establishments adopted cashless transaction methods, including online banking and digital payment systems.

Government Initiatives and Surveys:

• Annual Survey of Unincorporated Enterprises (ASUUE): Initiated by the National Statistical Office (NSO) to provide quarterly bulletins on the informal sector, enhancing data availability for policymakers and researchers.
• Commitment to High-Frequency Indicators: The NSO has committed to providing timely and relevant data on the informal sector’s dynamics, vital for economic planning.

Sectoral Insights:

• Service Sector Growth: The informal service sector witnessed a 24.82% increase in establishments and a 31.13% rise in employment compared to the previous year.
• Informal Sector's Contribution to GDP: The informal sector remains a major contributor to GDP, providing substantial employment and supporting local entrepreneurship.

Statistical Overview (January-March 2026):

• Total Establishments: 9,16,472
• Percentage of Ownership and Partnership Establishments: 98.95%
• Percentage of Rental Worker Establishments: 13.54%
• Total Workers: 15,17,055
• Percentage of Other Workers (including unpaid family workers): 14.26%

Methodology:

• The survey covered both rural and urban areas across India, excluding some remote regions. It utilized a multi-stage sampling design and computer-assisted personal interviewing for data collection.

Important Notes:

• The quarterly bulletin is part of ongoing efforts to provide insights into the informal sector, which encompasses only a portion of the non-agricultural economy.
• Variations in sampling and classification methods necessitate careful interpretation of the quarterly results.

The data and findings from the NSO highlight the robust growth of the informal sector in India, indicating its critical role in economic recovery and job creation post-pandemic.