New Delhi: India’s informal economy continued its expansion in 2025, supported by government efforts to boost micro, small and medium enterprises through reduced compliance burdens, improved access to financing and cuts in the goods and services tax regime.
According to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025 released by the Ministry of Statistics and Programme Implementation, the number of unincorporated enterprises rose by nearly 8% to 7.92 crore during January-December 2025, up from 7.34 crore in the previous survey period of October 2023 to September 2024. The expansion reflects broad-based growth across sectors, underlining the resilience of the non-agricultural informal economy.
The informal sector remains a critical pillar of India’s economy, contributing about 45% to GDP and employing nearly 80% of the workforce. Among sectors, ‘Other Services’ recorded the fastest growth in establishments at 10.29%, followed by manufacturing at 6.48% and trade at 6.18%.
Economic output also showed strong momentum. Gross value added (GVA) of informal enterprises rose by about 10.87% to ₹19.92 lakh crore in 2025, compared to ₹17.97 lakh crore in 2023-24. The trade sector led this growth with a 16.77% increase in GVA, followed by manufacturing at 8.52% and other services at 7.36%. In terms of share, other services contributed 42% of total GVA, followed by trade at 37% and manufacturing at 21%.
Productivity indicators improved during the period. GVA per worker increased by 4.54% to ₹1,56,539, while GVA per establishment rose to ₹2.52 lakh from ₹2.45 lakh earlier. Employment in the sector also expanded, growing by 6.18% to 12.80 crore workers in 2025, adding over 74.52 lakh jobs compared to the previous survey period.
The ‘Other Services’ segment generated the highest employment growth at 7.40%, accounting for around 35 lakh new jobs. Urban areas continued to employ more workers than rural regions, reflecting ongoing structural shifts in the economy.
The survey also pointed to gradual improvements in income levels, with emoluments per hired worker rising by 3.88%, led by an 8.5% increase in the trade sector. Digital adoption saw a sharp rise, with the share of establishments using the internet increasing from 26.7% to 39.4%, indicating a growing reliance on digital tools for business operations.
Women’s participation in entrepreneurship showed only modest gains, with the proportion of female-owned proprietary establishments rising slightly to 27% from 26.2% in the previous survey.
Overall, the findings suggest that India’s informal sector is steadily recovering from the disruptions caused by the Covid-19 pandemic, with improvements in output, employment, productivity and digital adoption, although challenges such as gender parity and sustained income growth remain.