Report Highlights Informal Economy Performance in Indian Cities
A recent report by the National Statistical Office (NSO) has mapped the informal economy across 46 million-plus cities in India, revealing significant variations in business value and worker productivity. Faridabad emerged as the leader in value per business, while Delhi topped the chart in worker productivity, according to the report published by the Tribune News Service on July 6, 2026.
Faridabad Leads in Value per Business
Faridabad, a city in the National Capital Region, recorded the highest gross value added (GVA) per business among all surveyed cities. The report indicates that informal enterprises in Faridabad generate an average GVA of over Rs 2.5 lakh per establishment, surpassing other major urban centers. This performance underscores the city's robust small-scale industrial base and entrepreneurial activity.
Delhi Tops in Worker Productivity
Delhi, the national capital, led in worker productivity within the informal sector. The average GVA per worker in Delhi was reported at approximately Rs 1.8 lakh, the highest among the 46 cities. This reflects efficient labor utilization despite the informal nature of many enterprises, which often operate without formal registration or regulation.
Scope and Methodology of the NSO Report
The report, titled "Urban Unincorporated Enterprises in Million-Plus Cities," covers the period 2022-23 and includes data from over 4.5 lakh informal enterprises across 46 cities. It defines informal enterprises as those not registered under the Companies Act, 2013, or the Factories Act, 1948, and includes sole proprietorships, partnerships, and other unincorporated entities. The survey collected information on employment, gross value added, fixed assets, and operating expenses.
Key Findings Across Cities
Among other findings, the report noted that cities like Surat and Pune performed well in terms of GVA per business, while Mumbai and Bengaluru showed high worker productivity. However, Faridabad and Delhi stood out distinctly in their respective metrics. The report also highlighted that the informal sector contributes significantly to urban employment, with over 60% of workers in these cities engaged in unincorporated enterprises.
Implications for Policy and Economic Growth
Economists view the findings as crucial for understanding the dynamics of the informal economy, which remains a large but often overlooked part of India's economic landscape. According to the report, the informal sector in these cities employs millions but faces challenges such as lack of access to credit, technology, and formal markets. Policymakers may use this data to design targeted interventions to boost productivity and formalize businesses gradually.
"The data provides a granular view of how informal enterprises operate in urban India. Faridabad's high value per business suggests a concentration of efficient small firms, while Delhi's worker productivity indicates better utilization of labor despite informal conditions," said a senior official from the Ministry of Statistics and Programme Implementation, who spoke on condition of anonymity.
Comparisons with Previous Surveys
The report also compares current data with the 2015-16 survey of unincorporated enterprises. It shows that the average GVA per business has grown by about 15% over the decade, while worker productivity increased by 12%. However, regional disparities remain stark, with cities in western and northern India outperforming those in the east and northeast.
Future Directions
The NSO plans to conduct similar surveys every three years to track changes in the informal economy. The findings are expected to aid in the formulation of policies under the 'Make in India' and 'Skill India' initiatives, aiming to integrate informal enterprises into the formal economy while enhancing their productivity and sustainability.
