The Landscape of Self-Employment in India: Trends, Constraints, and Policy Prescriptions

Farzana Afridi ()
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Farzana Afridi: Indian Statistical Institute (Delhi)

The Indian Journal of Labour Economics, 2025, vol. 68, issue 1, No 2, 23-44

Abstract: Abstract This paper assesses the structure and quality of self-employment in India, over several decades. India, historically, has had a much larger share of workers who are self-employed and a smaller proportion of wage and salaried workers. This structure of labour force participation has not shifted much in decades. In recent years, the proportion of self-employed has risen relative to the pre-pandemic era, and much more so for women. At the same time, significant underemployment accompanies low earnings of the self-employed. The paper highlights three key constraints for improving the quality of or transitioning out of self-employment—vocational skilling, access to formal credit and legal support for entrepreneurship. It concludes by discussing the implications of technological change and digitisation for self-employment and the need for reforming the legal framework of self-employment in India.

Keywords: Self-employment; Trends; Quality; Skills; Gender (search for similar items in EconPapers)
JEL-codes: J21 J24 J31 J48 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s41027-025-00561-5

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