India's Self-Employment Boom: A Game-Changer in Job Growth

HDFC Bank's report reveals that self-employment has surged dramatically, outpacing salaried work and casual labour as the fastest-growing employment category in India. Between FY18 and FY24, self-employment increased from 239 million to 358 million, fueled significantly by female workforce participation and MSMEs.

According to HDFC Bank's Employment Trends in India report, self-employment has emerged as the primary catalyst for job growth in the country over the last six years. The report indicates a robust rise from 239 million self-employed individuals in FY18 to 358 million in FY24, reflecting a healthy 7% CAGR.

Outpacing the growth seen in salaried and casual labour sectors, self-employment has become India's fastest-growing employment category. Salaried jobs witnessed a smaller increase from 105 million in FY18 to 119 million in FY24, growing at a subdued 4.1% CAGR. Meanwhile, casual labour stagnated, with only an 8 million worker increase to 122 million, achieving a 1.1% CAGR during the same period.

The report further highlights a significant rise in the Labour Force Participation Rate (LFPR), climbing from 53% in FY18 to 64.3% in FY24, with women's participation climbing to 31.7% and men's at 58.2%. Notably, female employment surged by 103 million people, nearly doubling the increase recorded for male workers at 52 million, thus illustrating the growing trend towards self-employment among women.

The self-employed now constitute over half of India's employed population, playing a central role in the nation's employment landscape. Additionally, shifting sectoral employment patterns indicate a continued rise in agricultural jobs, especially among women, despite growing non-farm opportunities.

Growth in non-farm employment was chiefly contributed by services, construction, and manufacturing sectors. Services created 41 million new positions between FY18 and FY24, led by wholesale trade, retail, and transportation. Manufacturing's increase to 70 million jobs was dominated by textiles and apparel, while MSMEs accounted for nearly half of employment in both manufacturing and services sectors.

(With inputs from agencies.)