India's informal sector demonstrated robust performance in the first quarter of the current financial year, with establishments growing 9% year-on-year to 8.7 crore from approximately 8 crore in the corresponding period last year, according to official data reported by The Times of India. The vast non-agriculture informal sector, which provides livelihood to the majority of Indians, also recorded employment growth of 7% to 13.7 crore during April-June. The sector's expansion comes amid concerns over rising costs of essential commodities, including fuel and food, due to the prolonged crisis in West Asia impacting small businesses. As per The Times of India, the bulletin noted that more and more of these informal enterprises are now going digital and using the internet.
The employment landscape showed significant gender representation improvements, with women's share rising to nearly one-third of total workers in the informal sector, as reported by The Times of India. Urban areas outperformed rural areas on both establishment and employment metrics. Urban establishments grew 15% to 4.2 crore from 3.7 crore, while urban employment increased 12% to 7.4 crore. This urban-rural performance gap reflects the sector's concentration in urban centers and their resilience during the current economic environment.
The other services sector recorded the highest growth among all sectors, with both establishments and employment increasing by nearly 21%, according to The Times of India data. This sector-specific performance highlights the diverse nature of India's informal economy and the varying growth trajectories across different business categories within the sector. The strong growth in the other services sector suggests continued dynamism and expansion in this segment of the informal economy. When compared sequentially, the unincorporated sector showed a decline, with 9.2 crore unincorporated establishments employing 15.1 crore workers in the January-March quarter of 2025-26, as reported by The Times of India.
