Non-farm businesses increased by 13%, reaching 7.3 crore, according to a government survey

The number of non-farm businesses in the country, including proprietorships, partnerships, and self-help groups, grew by 12.84% to 7.34 crore, according to an annual survey conducted by the Union Ministry of Statistics. The survey covers enterprises other than companies for the period from October 2023 to September 2024.

In a statement, the ministry highlighted that the “Annual Survey of Unincorporated Sector Enterprises for 2023-24” revealed notable growth in establishments, employment, and productivity within the unincorporated non-agricultural sector. The findings demonstrate the sector’s recovery from pandemic-related challenges and its renewed momentum.

Most of the enterprises surveyed are likely to be proprietorships, such as small shops run by individuals, but partnerships and self-help groups are also included. Chief Economic Advisor V. Anantha Nageswaran, who attended the survey’s release, clarified that the term “unincorporated” should not be equated with “informal.”

Saurabh Garg, Secretary of the Ministry of Statistics and Programme Implementation, described the rise in the number of enterprises in 2023-24 compared to the previous year as “a very healthy growth.”

According to the survey, the manufacturing sector contributed slightly over one-fifth of the gross value added (GVA) among these enterprises, while the trade sector accounted for just over one-third. Other services made up 44% of the GVA.

During the survey period, these enterprises employed 12 crore people, marking a nearly 10% increase from the 10.9 crore employed in the previous survey period. The ministry described this as a reflection of “robust labour market growth.”

The share of women-owned proprietary establishments also saw a significant rise, increasing from around 23% in 2022-23 to 26.2% in 2023-24. The ministry noted this as “a positive shift in women’s participation in business ownership.”

India has 7.34 crore non-farm, non-company enterprises, significantly outnumbering the 17.9 lakh businesses incorporated as companies, highlighting the dominance of small-scale businesses.

The statistics ministry’s statement also revealed that there were 5.97 crore establishments in India during the 2021-22 survey period. However, this figure is lower than the 6.3 crore non-agricultural, unincorporated enterprises reported in the 73rd round of the National Sample Survey conducted in 2015-16.

An individual familiar with the surveys, speaking anonymously, explained that both surveys used the same methodology, and the decline could be attributed to the economic disruptions caused by the COVID-19 pandemic.

The survey results come amid signs of recovery in the rural economy, with two-wheeler sales increasing 14% year-on-year in the April-November period of the current fiscal year, reaching 1.32 crore units.

The ministry reported a 13% increase in the average earnings per hired worker in 2023-24, compared to 2022-23, indicating an improvement in wage levels.

“This wage growth acts as a catalyst, bolstering the labor market, boosting productivity, and driving broader economic demand. The manufacturing sector saw the highest increase in this area, with a growth of just over 16%,” the ministry said.