
India's unincorporated non-farm sector experienced its sharpest quarter-on-quarter contraction in both employment and establishment count at the all-India level since the National Statistics Office (NSO) began releasing quarterly unincorporated enterprise data in January-March 2025. According to the latest Quarterly Bulletin of Unincorporated Sector Enterprises released by the NSO on Friday, the sector had an estimated 86.7 million establishments in the June quarter, up 9.20% from 79.4 million a year earlier. Employment rose to 137 million workers, a 6.55% year-on-year gain, but compared with the preceding March quarter of FY26, the number of establishments and workforce fell 5.4% and 9.7% respectively.
The contraction was overwhelmingly dominated by rural India, with rural establishments falling almost 10% and the rural workforce dropping 13.4% between the March and June quarters. Urban areas showed far steadier performance, with the urban establishment base remaining essentially flat and urban employment slipping a comparatively modest 6.3%. This represents a sharp contrast to the double-digit quarter-on-quarter expansion seen in the January-March period, when establishments had grown 16.5% and the workforce by 23.6%.
By activity, manufacturing establishments fell 8.6% quarter-on-quarter while its workforce declined 12.1%. Trade saw a sharper decline, with establishments falling 11.2% and workers by 12%. The 'Other Services' segment was the only segment to see its establishment count remain broadly stable, rising 0.4%, though its workforce fell 6.7%. Digitalisation continued to deepen during the quarter, with 82.2% of establishments reporting internet usage compared with 80.9% in the previous quarter.
The composition of employment continued to tilt towards self-employment, with working owners rising to 62.4% of all workers in April-June 2026, up from 60.2% a year earlier, while hired workers slipped to 22.8% from 24.4%. Between January-March and April-June, the working-owner share climbed 1.4 percentage points while the hired-worker share fell a sharper 2 percentage points. Additionally, female workers accounted for 30.56% of total employment in the quarter compared with approximately 29% in the previous quarter.