Rising Self-Employment in India: Factors and Challenges

  Oct 21, 2023

India's Self-Employment : Challenges and Implications

Why is self-employment on the rise in India?

Factors contributing to the growth of self-employment in India include uneven recovery from pandemic disruptions and limited formal job opportunities, especially for women and in rural areas.

Who is most affected by self-employment trends?

Women and rural workers are disproportionately impacted by self-employment, which often results in lower incomes compared to regular-wage work.

Are there regional variations in self-employment?

Yes, there are significant inter-state variations, with states like Uttar Pradesh, Himachal Pradesh, and Rajasthan having higher shares of self-employed workers. In contrast, more prosperous states like Tamil Nadu, Kerala, and Andhra Pradesh have lower self-employment rates.

Why isn't formalization of the economy leading to more formal jobs?

Despite economic formalization, the creation of quality formal jobs remains a challenge. Informal contracts and the prevalence of gig work may contribute to this issue.

What contributes to the problem of job quality in India?

India's focus on low-skill manufacturing and limited participation in global markets may contribute to the challenge of creating quality jobs.

What's the way forward for improving job quality?

Addressing the issue of job quality in India requires a multifaceted approach, including enhancing formal job opportunities, promoting entrepreneurship, and improving access to quality education and training.


While India's labor force participation and unemployment rates show improvement, the prevalence of self-employment highlights the need for a deeper examination of job quality and formalization efforts.


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