Manufacturing sector leads decline in hired worker share
Manufacturing leads hiring slump as paid staff share dips; informal businesses move toward leaner, owner-operated units
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Prefer us on GoogleLast Updated: Mar 26, 2026, 18:20 IST1 min
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In a Nutshell
- Manufacturing saw steep decline in hired worker share last quarter
- Informal firms lean on owners more, hire fewer paid workers
- Trade and services also saw declines in hired employment
India’s informal and small business sector is relying less on hired workers, with the latest government data showing a broad-based decline in employment of paid staff between July-September and October-December 2025 quarter. Data also shows that informal sector businesses are increasingly relying on “Working Owners” to sustain operations.
The rise of the self-sustaining enterprise
Data from the quarterly survey of the unincorporated sector enterprises shows the share of hired workers among all worker types fell from 25.9 percent to 23.9 percent in the October-December 2025 quarter, a drop of two percentage points. Meanwhile, the share of working owners, those who run and work in their own establishments, rose from 60 percent to 62 percent, suggesting businesses are increasingly relying on owner-operated models rather than expanding their paid workforce.:
Meanwhile, the “Others” category, which includes unpaid family members, remained stagnant at 14 percent, indicating that the shift is purely a trade-off between hired employees and the business owners themselves.
This shift points to a broader trend of businesses tightening labour costs, possibly in response to muted demand or thinning margins.
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Graphic of the day: Dual sector growth Manufacturing leads the decline in hired staff
The contraction in hiring is most visible when looking at the share of establishments that actually employ hired labour. Across all establishment types, the share of businesses that employed hired workers fell from 13.4 percent to 12.7 percent between the two quarters.The sectoral picture reinforces this concern. Manufacturing saw the steepest decline, dropping from 11.4 percent to 10.5 percent—a fall of nearly a full percentage point in just one quarter. Trade establishments also recorded a notable decline, sliding from 16.3 percent to 15.4 percent. Other services showed a more modest dip, from 12.7 percent to 12.4 percent.A breakdown of worker types within manufacturing sharpens the picture further. The share of hired workers in the sector fell sharply from 27.3 percent in July-September 2025 to 23 percent in October-December 2025, a drop of more than four percentage points in a single quarter. Working owners, meanwhile, rose from 61 percent to 65.4 percent over the same period.
Manufacturing’s shrinking hired labour share and the increasing move toward owner-operated units could likely be driven by weak orders or rising operational costs. While the data does not capture reasons behind the shift, seasonal factors may partly explain this quarter-on-quarter movement.
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First Published: Mar 26, 2026, 18:31
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