New Delhi [India], November 17 : Self-employment has emerged as the strongest engine of India's job growth over the past six years, according to HDFC Bank's Employment Trends in India report.
The study showed that self-employment (farm + non-farm) surged from 239 million in FY18 to 358 million in FY24, marking what the report describes as a "healthy CAGR of 7.0 per cent"
This surge makes self-employment the fastest-growing category across India's labour market, outpacing the growth of salaried work and casual labour.
Salaried or regular wage jobs increased only marginally, from 105 million in FY18 to 119 million in FY24, growing at a more subdued "CAGR: 4.1 per cent", while casual labour stagnated, inching up from 114 million to 122 million at a "CAGR: 1.1 per cent" during the same period.
This rapid expansion in self-employment occurred alongside a broader rise in labour market participation.
The report highlighted that the Labour Force Participation Rate (LFPR) for the working-age population (15-59 years) increased from 53 per cent in FY18 to 64.3 per cent in FY24, and that "women's participation has increased and stands at 31.7 per cent as of FY24", while male LFPR stands at 58.2 per cent.
The report noted that, between FY18 and FY24, total employment increased by 155 million, and a notable share of this surge was driven by women.
The report stated, "the increase in employment of 155 mn people was driven by higher female workers," with female employment rising by 103 million, nearly double the addition of male workers at 52 million
This suggests that more women and youth have been entering the labour force, many of whom may be turning toward self-employment due to limited availability of wage-based jobs.
The report noted that, with the self-employed now accounting for well over half of India's total employed population, this expanding segment has become central to the country's employment landscape.
It adds, a significant backdrop to rising self-employment is India's shifting sectoral employment landscape. As of FY24, 614 million people were employed in India, with the non-farm sector accounting for 54 per cent and agriculture 46 per cent of total employment
But, despite the rise of non-farm opportunities, agriculture continued to add employment, primarily through female workers. In the farm sector, the increase was "driven by higher female employment (+74 million) while male employment increased marginally (+5 million)"
At the same time, non-farm job creation was led by services, construction, and manufacturing. Services alone added 41 million jobs between FY18 and FY24, construction added 20 million, and manufacturing added 15 million.
Within services, the largest contributors to employment were wholesale and retail trade, transport, education, hotels and restaurants, and communication-related activities. Wholesale and retail trade alone accounted for "nearly 40 per cent of total increase in trade and services employment" and over one-fifth of non-farm job creation
Manufacturing employment grew to 70 million, led by textiles, food and beverages, metals, furniture, and tobacco, with "Textile and apparel accounting for nearly one-third of the increase" in manufacturing jobs
MSMEs, too, emerged as a central pillar of job creation. They accounted for 48 per cent of manufacturing employment and 48 per cent of services employment as of FY24, with MSME trade and services employment rising by 17 million in just two years.