State of informal economy

District estimates reveal high concentration

The National Statistics Office’s (NSO’s) recent release of the first ever district-level estimates from the Annual Survey of Unincorporated Sector Enterprises (Asuse) 2025 provides a new geographic lens on this segment of India’s non-agricultural economy. The report covers 757 districts and, for the first time, allows the sector’s scale, employment structure, and economic performance to be examined below the level of states. At national level, Asuse 2025 estimates 79.2 million establishments employing 128.1 million workers. Uttar Pradesh accounts for the largest share of establishments and workers, followed by West Bengal and Maharashtra. But the data suggests that size and value creation are different things. Maharashtra accounts for a larger share of gross value added (GVA) than its share of establishments, while Tamil Nadu also punches above its weight on value added. The district data make this divergence much sharper.

 

The concentration is striking. Just 130 districts account for half the establishments, 121 account for half the workers, and only 95 districts account for half of GVA. In other words, economic value is more geographically concentrated than either enterprises or employment. The largest establishment clusters include North 24 Parganas, with 1.6 million establishments; South 24 Parganas with 1.03 million; and Kolkata with 0.88 million (all in West Bengal). The pattern is repeated within states. In Maharashtra, for instance, the top eight districts account for more than half the establishments and the top 10 for 59 per cent. Pune alone has about 600,000 establishments and 1.27 million workers.

 

Yet the establishment count tells only part of the story. Rangareddy in Telangana, for instance, has a GVA of about ₹6.64 lakh per market establishment and ₹2.72 lakh per worker, while Pune records about ₹4.79 lakh per establishment and ₹2.28 lakh per worker. The report’s “GVA per worker” measure should not be treated as a pure measure of productivity because the industry mix, capital intensity and local economic conditions matter. The differences, nevertheless, demonstrate that where enterprises are numerous is not necessarily where their economic contribution per worker is highest. There is similarly considerable variation in remuneration. Annual emolument per hired worker is about ₹4.64 lakh in Dehradun, as against around ₹80,000 in select districts in Bihar and Jharkhand. The spread indicates that the unincorporated sector contains very different labour markets, not merely different numbers of small enterprises.

 

The gender dimension is equally heterogeneous. Women constitute at least one-third of the workforce in 237 districts, with the strongest concentrations in several northeastern and southern states. Manipur is notable. For instance, women account for nearly 70 per cent of workers in Imphal East. The corresponding figures are 78.41 per cent in Nirmal and 69.6 per cent in Nizamabad districts (both in Telangana). Female ownership is also high in these regions, reaching 80 per cent in Nirmal and 72 per cent in Imphal East. Thus, India does not have a single unincorporated economy. It has many local economies, differing in scale, employment intensity, female participation, remuneration and value creation. District-level policy, therefore, has to look beyond enterprise counts. Although the NSO cautions that some district estimates have high relative standard errors and need careful interpretation, it does give a broad idea and will aid policy intervention at local levels.