Microenterprises in India: A Multidimensional Analysis

Azim Premji University,


Microenterprises have been the engines of job growth in the majority of dynamic economies. India is home to thousands of microenterprise clusters as well as millions of distributed entrepreneurs who can become job creators. Fostering of such mass-entrepreneurship is key to addressing India’s employment challenge. Case studies of clusters in general, and of women entrepreneurs in particular, show that if key factors such as collective action, infrastructure, credit, and market linkages are in place, returns to entrepreneurship are vastly improved. Inspirational stories are also emerging in the use of fourth industrial revolution technologies to improve access to markets and enter global value chains in a way that awards greater agency to women entrepreneurs.


The report consists of five data chapters, a chapter discussing measurement and data issues, and a concluding chapter. 

In Chapter Two, we start with a discussion of the recent labour market trends, covering the pre-pandemic growth slowdown and the pandemic with its aftermath. 

Chapter Three starts the long-run analysis by first examining the relationship between growth and structural change at the national and state levels since the 1980s. We examine the pace of both the Lewis and the Kuznets processes, overall and for key identities. 

Chapter Four focuses on women’s employment. We approach the issue from both a labour supply and a labour demand angle. From the supply side, we investigate the role of gender norms in allowing women to access paid work, especially outside the home. On the demand side, the data is more limited, but we show that controlling for supply-side factors such as norms and education, labour demand (availability of work opportunities) plays an important role in explaining whether women do paid work or not.

Chapter Five shows that gender, caste and religion-based identities continue to be strongly correlated with the type of employment (causal, salaried, self, etc.) as well as the quality of jobs (informal, semi-formal, formal). It also shows that intergenerational mobility has increased over time in India. 

Chapter Six examines disparities in earnings and measures the changing occupational and industrial segregation over time. It also looks at the relationship between caste and entrepreneurship.

Chapter Seven discusses several issues related to measurement of employment for women as well as the necessity for data going down to the jati level and data on religion-caste intersections. 

Chapter Eight concludes. In this concluding chapter, we return to the key points revealed by the analysis and also discuss limitations of the study.

Finally a word on the academic and policy literature in which this report is situated. There is a large amount of writing — books, articles, policy papers — on questions of gender, caste, religion and labour. It is not our intention here to review this vast literature. Where appropriate we have pointed readers to further readings on various topics, but the resulting bibliography has no claims to being exhaustive.

The analysis presented here also leaves many important and interesting questions unanswered. We have no doubt that future research will take on these questions and produce knowledge that is of practical use for the design of better policy.