ASUSE 2025: Number of unincorporated sector firms up 8% in 2025

India’s informal economy saw continued momentum in expansion in 2025 as the government took concerted efforts to support micro, small and medium enterprises with measures such as reducing compliances, providing financing support and cuts in the goods and services tax regime.

The number of unincorporated sector enterprises grew by nearly 8% to 79.2 million in January to December 2025 from 7.34 crore in October 2023–September 2024. The data is a part of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, which was released on Tuesday.

The ASUSE is seen as an important indicator of the health of India’s informal economy, which contributes significantly to the overall economy, contributing about 45% to the total GDP of the economy in FY23. About 80% of the country’s labour force is also employed in the informal sector.

Among the broad sectors covered, the number of establishments in the “Other Services” sector recorded the maximum growth at 10.29% followed by a 6.48% increase witnessed by the manufacturing sector and 6.18% by trade sector.

Productivity is also seen to have increased in the informal sector firms. Gross value added by the informal sector enterprises rose by 10.85% to Rs 19.92 lakh crore in ASUSE 2025 from Rs 17.97 lakh crore in ASUSE 2023-24.

Similarly, GVA per worker, which is a measure of labour productivity of the sector, rose to Rs 1,56,539 in 2025 from. Rs 1,49,742 in 2023-24. During the same period, GVA per establishment also increased to Rs 2.52 lakh from Rs 2.45 lakh in the previous survey.

The number of workers employed in informal sector firms grew by 6.2% in the period to 128 million in 2025 from 120 crore in 2023-24 with a total of 7.45 million jobs added. The number of workers employed in these firms remained higher in urban areas at 680,000 compared to 600,000 in rural areas in 2025.

The percentage of female-owned proprietary establishments increased only marginally to 27% in ASUSE 2025 from 26.2% in 2023–24.

Informal sector enterprises have been slowly recovering from the impact of the Covid-19 pandemic and the lockdown which led to closure of many small businesses and left a large number of workers without jobs.