India's employment landscape is undergoing a dramatic transformation, with self-employment emerging as the dominant force in job creation over the past six years. According to HSBC Bank's comprehensive 'Employment Trends in India' report, the self-employment category has significantly outpaced both casual labor and salaried work, reshaping how Indians earn their livelihoods.
The Self-Employment Revolution: Numbers Tell the Story
The data reveals an extraordinary growth trajectory for self-employment in India. The sector has expanded from 23.9 crore jobs in FY18 to 35.8 crore in FY24, representing a compound annual growth rate (CAGR) of 7%. This healthy growth has positioned self-employment as the cornerstone of India's labor market, now accounting for well over half of the country's total employed population.
In comparison, salaried or regular wage jobs showed only marginal improvement, growing from 10.5 crore in FY18 to 11.9 crore in FY24 with a CAGR of 4.1%. Casual labor remained largely stagnant with a minimal 1.1% CAGR, reaching 12.2 crore in FY24 from 11.4 crore in FY18.
Women Driving Workforce Transformation
One of the most significant developments highlighted in the report is the remarkable surge in female participation in the labor force. Total employment increased by 15.5 crore people in FY24, with women accounting for a substantial portion of this growth.
Female employment surged by 10.3 crore, nearly doubling the addition of male workers at 5.2 crore. While men still lead in overall participation share at 58.2%, women's participation has shown impressive growth, reaching 31.7% in FY24.
This demographic shift, combined with the expansion in self-employment, indicates that more women and younger job seekers are entering the labor force and increasingly turning toward entrepreneurial ventures due to limited availability of traditional wage-based employment opportunities.
Sector-Wise Job Creation Patterns
The report provides detailed insights into which sectors are generating employment opportunities across the Indian economy. In the non-farm, non-agricultural sectors, construction led with 2 crore jobs added, followed by manufacturing with 1.5 crore new positions, and services dominating with 4.1 crore employment opportunities.
Within the robust services sector, communication-related activities, education, hotels and restaurants, retail and wholesale trade, and transport emerged as major employers. Trade alone accounted for 40% of the total employment increase and comprised over 20% of total non-farm job creation.
Manufacturing employment grew to 7 crore across diverse segments including food and beverages, furniture, metals, textiles, and tobacco. The textile and apparel sector proved particularly significant, accounting for nearly 33% of the manufacturing employment increase.
Micro, Small, and Medium Enterprises (MSMEs) demonstrated their crucial role as job creators, accounting for 48% of manufacturing employment and 48% of services employment in FY24. The MSME trade and services segment alone added an impressive 1.7 crore jobs in just two years.
Broader Economic Implications
The surge in self-employment has occurred alongside a substantial increase in the labor force participation rate (LFPR), which jumped from 53% in FY18 to 64.3% in FY24. The LFPR calculation specifically focuses on working individuals aged 15-59 years, reflecting broader engagement in economic activities.
As of FY24, India had a total of 61.4 crore employed individuals, with the non-farm sector accounting for 54% and agriculture representing 46% of employment. Interestingly, despite the growth in non-farm jobs, agriculture has continued to add workers, particularly female participants.
In the farm sector, women dominated with 7.4 crore jobs, compared to a marginal increase in male employment by 5 crore. This trend underscores the evolving nature of self-employment in India, which is gradually shifting away from traditional farm roles toward more diverse entrepreneurial activities.
The HSBC report concludes that self-employment has become central to India's employment landscape, not only creating the majority of jobs but also fundamentally reshaping how Indians approach work and economic participation in the world's fastest-growing major economy.
