India’s unincorporated sector added 74.5 lakh workers and 58.5 lakh establishments between the 2023-24 and 2025 rounds of the Annual Survey of Unincorporated Sector Enterprises (ASUSE), government data shows. Despite a steady increase in the number of establishments, the pace of worker addition is increasingly shifting toward rural areas, while manufacturing continues to lag behind trade and services in both job creation and wage growth.
Rural areas added more workers than urban areas between the 2023-24 and 2025 rounds of ASUSE, 38.7 lakh against 35.8 lakh, despite adding fewer establishments. Urban areas saw 31.8 lakh new establishments added, compared to 26.7 lakh additions in rural areas. The divergence suggests that urban establishments are, on average, adding fewer workers per new unit than their rural counterparts. This hiring lag in cities could also reflect a move toward formalisation, where labour-intensive firms transition into the registered corporate sector, leaving only small-scale, owner-run shops in the unincorporated data.
Across sectors, services led worker additions with 34.9 lakh new workers, followed by trade at 27.6 lakh in the same period. Manufacturing added just 12.1 lakh workers—less than half of trade and barely a third of services.
Even the structural composition of the manufacturing sector is shifting away from hired workers. The share of manufacturing establishments that employ hired workers slipped between the two survey periods. While overall in manufacturing, it fell from 11.73 percent to 10.99 percent, the decline was more pronounced in urban areas, where the share dropped from 20.7 percent to 19.21 percent, compared to a marginal dip in rural areas from 5.76 percent to 5.62 percent. The trend suggests that manufacturing units, particularly in urban centres, are becoming less likely to take on paid employees.
Compensation trends further highlight the pressure on informal manufacturing. While average annual emoluments in the sector rose 4.4 percent to Rs 1.41 lakh they remain the lowest among the three sectors.
The trade sector saw a higher 8.5 percent wage growth between ASUSE 2023-24 and ASUSE 2025. Services, despite paying the highest absolute emoluments at Rs 1.51 lakh, recorded the slowest growth at just 1.6 percent.
First Published: Mar 26, 2026, 18:56
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