Employment in India’s unincorporated sector rose marginally in the July–September quarter of FY26, according to the National Statistics Office (NSO). The latest quarterly bulletin shows that 128.6 million people were employed in the sector, up slightly from 128.57 million in the previous quarter.
The number of unincorporated establishments also increased to 79.7 million in Q2, compared with 79.42 million in April–June. “Both the number of establishments and overall employment recorded marginal growth despite global headwinds,” the NSO said.
Unincorporated enterprises include small businesses, sole proprietorships, partnerships and informal sector units that are not legally incorporated.
The share of hired worker establishments (HWEs) — units employing at least one regular hired worker — rose to 13.41% from 13.25% in Q1, indicating a modest improvement in organised operations.
A key driver of the quarter’s performance was the unincorporated manufacturing sector, which saw a rebound in both employment and establishment numbers. Manufacturing establishments accounted for 27% of the total in Q2, up from 26% in Q1, while the share of workers in manufacturing increased to 28% from 26%. Many units rely on casual and migrant labour that shifts to agriculture in Q1 and returns as manufacturing activity picks up, the NSO noted.
Digital adoption continued to rise steadily, with 39% of establishments using the internet in Q2, compared with 36% in the previous quarter. The NSO said the share of enterprises reporting some form of registration also increased, reflecting a gradual move toward formalisation.