Jobs in Informal Manufacturing Sector Remain Below 2015-16 Levels: Survey
India's informal manufacturing sector employment has stagnated at 3.5 crore in 2025, down from 3.6 crore in 2015-16, while formal manufacturing jobs rose 37% to nearly 2 crore, showing a sharp divergence in growth trajectories.
Key Points
- Informal manufacturing employment at 3.5 crore in 2025, down from 3.6 crore in 2015-16
- Formal manufacturing employment reached nearly 2 crore in 2023-24, up 37% from 2015-16
- Real wage growth in informal sector was modest at 2.1% CAGR over the decade
- Growth divergence suggests formalization is occurring but not comprehensively
Full Details
Data from the latest unincorporated enterprises survey reveals that India's vast informal manufacturing sector has seen employment remain flat for nearly a decade, with 3.5 crore people employed in 2025 compared to 3.6 crore in 2015-16. In contrast, the formal manufacturing sector has shown robust growth, with employment reaching just under 2 crore in 2023-24, representing a 37% increase over the 2015-16 baseline. The number of informal enterprises did increase slightly to 2.1 crore from 2 crore during this period. Real emoluments per hired worker in informal manufacturing grew at a compound annual growth rate of 2.1%, reaching Rs 72,172 from Rs 59,806. Experts note that while the organized sector has gained at the expense of the unorganized sector, this does not necessarily imply formalization of the overall economy.
Why It Matters
The stark divergence between formal and informal manufacturing employment points to structural transformation in India's economy, with potential policy implications for skill development, social security, and inclusive growth. The informal sector's stagnation could exacerbate income inequality if not addressed through targeted interventions.
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