Self-employed

Also called: Self-employed workers, Self-employment · Topic: Employment, Unemployment and Informalisation · NCERT: Class 10, Ch 3 "Money and Credit"; Class 11, Ch 6 "Employment: Growth, Informalisation and Other Issues"

Meaning

Self-employed workers own and run an enterprise (a farm, shop, workshop or small business) to earn a living. They are not hired by anyone else. In Indian data, this group also includes unpaid family helpers, who work in a family business or farm without regular pay.

It is the largest source of livelihood in India. About 58.4% of workers were self-employed in 2023-24 [3].

Formula: Self-employed share (%) = (self-employed workers ÷ total workers) × 100

Explanation

Where it fits: the three statuses of employment

• Status of employment means the worker's position in the enterprise where they work. India uses three broad statuses:
• Self-employed: owns and runs an enterprise. NCERT's example is the cement-shop owner at a construction site.
• Regular salaried: hired by a person or firm and paid regularly. Example: a civil engineer in a construction company.

• Casual: hired on others' farms or enterprises only when there is work, and paid for the work done. Example: a construction worker.

• Why status matters:

• The Worker Population Ratio (WPR) is the percentage of people in the population who have work [2]. It shows how many people work, but not how good their jobs are.
• Status shows one part of job quality. It tells us how secure and steady the job is, and how much say the worker has over the enterprise.

Who counts as self-employed

• Employers: run an enterprise and hire others.
• Own-account workers: run an enterprise without employees [4]. Examples are a saloon owner, a handloom weaver or a cold-drink shop owner.
• Unpaid family workers, also called helpers in a household enterprise:
• They help in a family business or farm run by a relative.
• They get no regular pay.

• Indian data counts them within the self-employed.

• The ILO (International Labour Organization) view:

• The 20th International Conference of Labour Statisticians (ICLS) adopted ICSE-18 in 2018. It has 10 detailed categories [4].
• Contributing family workers are the most vulnerable status. They get no regular wage and do not make the main decisions about the business [5].
• Vulnerable employment = own-account workers + contributing family workers [5][6].
• Non-vulnerable employment = wage and salaried workers + employers [6].
• India's self-employed group therefore mixes secure employers with vulnerable workers. A high self-employment share does not mean a lot of enterprise.

Rural–urban and gender pattern (NCERT Charts 6.1 and 6.2)

• Rural areas have more self-employed workers.
• Most farming families own and farm their own plots.

• So the farmer and the family members who help are all counted as self-employed.

• Urban areas have more regular employees. Factories, offices and shops need workers every day.

• Self-employment is over 50% for both men and women.
• More women are working now:
• Female Labour Force Participation Rate (LFPR), the share of people who are working or looking for work, rose from 23.3% (2017-18) to 41.7% (2023-24) [2].
• Rural female LFPR reached 47.6% (2023-24) [2].
• Many of these new women workers are own-account workers or helpers. This is one reason self-employment has risen.

What makes the share rise or fall

• Trend (NCERT Table 6.3, % of workforce):

Year	1972-73	1983	1993-94	2011-12	2017-18	2023-24
Self-employed	61.4	57.3	54.6	52.0	55.6	58.4

• Fall until 2011-12:
• Workers left self-employment for casual wage work.

• This was the casualisation phase, when casual work peaked at 31.8% in 1993-94.

• Rise since 2017-18. The Economic Survey 2024-25 figures show a rise from 52.2% (2017-18) to 58.4% (2023-24) [3]. NCERT gives 55.6% for 2017-18. Both show the same direction. Three reasons are given:

• More women are doing own-account and helper work, especially in rural areas [2][3].
• Distress self-employment after COVID: people who lost wage jobs started small, low-earning activities just to survive.

• The official view: more entrepreneurship, a preference for flexible work, and schemes such as Mudra Yojana, Skill India, Start-Up India and Stand-Up India [3].

• Worked example:

• Take 100 workers in 2023-24. About 58 are self-employed, 22 are regular and 20 are casual.
• The shares always add up to 100, so when one share rises, another must fall.
• From 2017-18 to 2023-24, the self-employed share rose by 6.2 percentage points (52.2 → 58.4), while the casual share fell by 5.1 points (24.9 → 19.8) [3].

In India

• Who measures it:
• The National Sample Survey Office (NSSO), under the Ministry of Statistics and Programme Implementation (MoSPI), started the Periodic Labour Force Survey (PLFS) in April 2017 [2].

• Figures from 1972-73 to 2011-12 come from the NSSO's five-yearly employment–unemployment surveys.

• How it is measured:

• Headline shares use usual status (ps+ss), which looks at a person's work over the last 365 days [2].
• Principal status (ps) is the activity the person spent the most time on in that year [2].

• Subsidiary status (ss) is extra economic work done for 30 days or more in the year [2].

• Latest figure: 58.4% of workers were self-employed in 2023-24, which makes it the largest status group [3].

• Support schemes:

• Mudra Yojana, Skill India, Start-Up India and Stand-Up India are linked to the rise in self-employment [3].

• Protection for informal self-employed workers:

• The e-Shram portal was launched on 26 August 2021. It builds a National Database of Unorganised Workers (NDUW) and gives each worker a Universal Account Number (UAN) [3].
• More than 30.51 crore workers had registered by 31 December 2024 [3].

Don't confuse with

• Regular salaried worker: the status depends on regular attachment to the job, not on how often the worker is paid. A rice-mill worker "paid daily but employed regularly" is a regular worker. They are neither self-employed nor casual.
• Casual worker: a casual worker is hired by someone else only when there is work, while a self-employed worker runs their own enterprise. NCERT calls casual workers the most vulnerable group. Even so, self-employment does not necessarily pay more than casual work.
• Worker Population Ratio (WPR): WPR (15+) was 58.2% (2023-24) [2]. That is the share of the population that works. The self-employed share of 58.4% (2023-24) is a share of workers [3].
• Entrepreneur / employer: an employer is only one part of the self-employed. Own-account workers and unpaid helpers are also counted, and the ILO classes those two groups as vulnerable employment [6].

Prelims Hooks

• The three statuses of employment are self-employed, regular salaried and casual. Unpaid family helpers are counted within the self-employed.
• The self-employed share is 58.4% (PLFS 2023-24) [3]. Trap: do not confuse it with WPR (15+) of 58.2% (2023-24) [2].
• Self-employment was highest at 61.4% in 1972-73 (NCERT Table 6.3) and lowest at 52.0% in 2011-12. It has risen since 2017-18.
• ILO "vulnerable employment" = own-account workers + contributing family workers. Employers and wage workers are "non-vulnerable" [6].
• ICSE-18 was adopted at the 20th ICLS in 2018 and has 10 detailed categories [4]. An own-account worker runs an enterprise without employees [4].
• PLFS was launched by the NSSO (MoSPI) in April 2017. Usual status looks back 365 days. Subsidiary status means work for 30 days or more in that year [2].

Mains Points

• Rising self-employment: enterprise or distress?
• The official view links the rise from 52.2% to 58.4% (2017-18 to 2023-24) to entrepreneurship, flexible work and schemes like Mudra [3].
• Critics point out that much of the rise comes from own-account workers and unpaid women helpers, and the ILO classes both as vulnerable [5][6].

• A balanced answer weighs the higher female LFPR [2] against the risk of a growing group of working poor, meaning people who work but earn too little to lift their households above the poverty line.

• Status is not quality:

• Many self-employed workers have no written contract, no social security (PF, pension, health cover) and uneven earnings.
• The Economic Survey 2024-25 notes that corporate profits reached a 15-year peak in FY24 while wages lagged behind [3].

• Policy should aim for employment-intensive growth, for example in labour-heavy manufacturing and MSMEs, so that low-earning self-employed workers can move into decent jobs.

• Formalisation and social protection (GS-II/GS-III):

• About 78% of workers are still self-employed or casual, even though EPFO net additions doubled from 61 lakh (FY19) to 131 lakh (FY24) [3].
• Bringing the self-employed under a safety net is therefore key. Useful links are e-Shram (30.51 crore registrations by 31 December 2024, with 12 schemes mapped to it) [3], the Labour Codes, and social security for gig and platform workers.

Related concepts

• Status of employment
• Unpaid family worker
• Regular salaried employees
• Casual workers
• Working poor

Read more

• Status of employment: self-employed, regular salaried and casual workers