Entrepreneurship in India's Unorganized Sector

India’s unorganized sector contributes significantly to the country’s economy. Research has indicated that around 75% of India’s manufacturing workforce works in this industry.

This chapter explores India's changing entrepreneurial environment, including its historical foundations, significant turning points, and the function of government programmes. With success stories like Infosys, Wipro, and TCS, this investigation illustrates the revolutionary impact of globalization and technology, spanning from the traditional family-run businesses to the post-1991 economic liberalization age. The Goods and Services Tax (GST), which went into effect in 2017, and the ‘Startup India’ initiative, which was unveiled in 2016, have played a significant role in promoting innovation, streamlining regulations, and building a business-friendly environment. Nevertheless, obstacles continue to exist, such as financial barriers, regulatory intricacies, and bureaucratic red tape. The chapter highlights the value of inclusion in entrepreneurship and explains how it can promote better decision-making, inventiveness, and market responsiveness. It discusses the importance of diversity and inclusion (D&I) for economic growth, pointing to the advantages it has for capital access, market expansion, and innovation.

The chapter examines the current situation of entrepreneurship in India, focusing on the variety of industries such as manufacturing, real estate, technology, healthcare, agritech, and fintech. Notable advancements are being made by female-led businesses, and the proptech and media industries are seeing revolutionary shifts. The discourse surrounding inclusion explicates the notion in the context of entrepreneurship, underscoring its function in establishing a welcoming and encouraging work environment for people from all backgrounds. In the context of innovation, market response, decision-making, talent pool access, and societal effect, the significance of D&I is examined. The analysis of inclusive entrepreneurship's effects on economic growth reveals how it fosters a culture of creativity, reduces unemployment, and has a favourable effect on enlarged consumer markets. It also examines the impediments to inclusion, including lack of representation, prejudice, network gaps, restricted access to money, and differences in educational attainment. There is an outline of government policies and activities that foster inclusive entrepreneurship, including programmes that provide financial aid, education, mentorship, and network access. With an emphasis on digital inclusion, financial inclusion, information accessibility, digital skill development, and remote work solutions, the role of technology and innovation in fostering inclusivity is examined. This thorough investigation offers a sophisticated perspective of India's diverse entrepreneurial environment, highlighting the vital role that inclusivity plays in innovation and long-term, sustainable economic success.

The unorganised sector of India’s economy grew quickly and made a substantial contribution. In the unorganised sector, formal activities contribute very little. The development of self-employment in an unorganised industry is driven by a variety of factors, including a high population, high unemployment rates, and an abundance of degree holders. The responsibilities of entrepreneurs and the difficulties faced by today’s youngsters who choose to work in the informal economy as self-employed are the agenda of this article. The article focuses on the current state of the unorganised sector, the importance of entrepreneurs in generating interest in self-employment, and the difficulties and obstacles that people have when deciding to work for themselves.

A whopping around 50 crores of India’s workforce, including those in the unorganised and self-employed sectors, is based on data from the 2021 to 2022 Economic Survey. The unorganised workforce in India has been classified by the government's Ministry of Work according to factors including occupation, kind of job, distress level, and service provision. This article focuses on the role of entrepreneurs and the challenges faced by today’s youth while considering self-employment in unorganised industries. This text discusses the current situation in the unorganised sector, the status and role of entrepreneurs in generating interest in self-employment, as well as the challenges and obstacles encountered while choosing self-employment.

The unorganised sector made a substantial contribution and saw fast growth in the Indian economy. The formal operations in the unorganised sector make a very little contribution. Factors such as a large population, high unemployment rates, and a significant number of individuals with degrees contribute to the production of self-employment opportunities in the unorganised sector. The Indian government established the “National Commission on Enterprises in the Unorganized/Informal Sector” on 20 September 2004, with the purpose of serving as an advisory body and overseeing the informal sector.

Driven by several enabling factors, the entrepreneurship ecosystem in India is progressing at an unprecedented pace. From rising purchasing power and evolving customer choices to digital transformations and constructive policy frameworks, entrepreneurs today have many avenues of opportunities to explore, analyse, and act upon. That said, the entrepreneurship scenario is not as conducive in the unorganised sector. Ridden by many issues including unclear regulations, informal economy, and lack of concrete data, the development of the entrepreneurial ecosystem in the unorganised sector is far from a desirable state of things. Against this background, this chapter specifically looks into the growth potential of entrepreneurship in the unorganised sector, the challenges that this sector presents, and a conceptual framework to encourage entrepreneurship in the informal sector of the economy. The chapter will prove conducive to the development of entrepreneurship in the unorganised sector and help in the creation of holistic benefits for all the stakeholders who are part of value chains operating in the unorganised sectors of the economy.

The unorganised sector of the economy in India is largely unregulated by law but governed by customs. More than half of the national product is derived from this sector, which indicates the significant role it plays in India’s economic activity (Harris-White, 2014). This sector presents both opportunities and challenges for entrepreneurship. The characteristics of the informal sector are examined, highlighting both positive and negative aspects. Despite over 70 per cent of the workforce being involved in the unorganised sector in India, there are several areas of uncertainty and ambiguity (Tripathi, S. S., & Brahma, M. (2018). Technology entrepreneurship in emerging markets: An exploration of entrepreneurial models prevalent in India. Technology Innovation Management Review, 8(1)). The lack of a regulatory framework and an unsystematic and limited marketing approach has hindered the sector’s ability to gain the confidence of stakeholders and investors. Employees in the informal sector face job insecurity, limited growth opportunities, and lack of leave schemes. This paper has also attempted to explore entrepreneurship in other emerging economies like China, India, Singapore, Indonesia, Thailand, and Malaysia, in order to identify the best practices followed by neighbouring economies that could be adapted by India. This study emphasises that effective entrepreneurship in the unorganised sector will be crucial for employment growth in India. It will also help transition people out of subsistence living and alleviate poverty from the lower end of the economic pyramid through entrepreneurship. The study suggests that creating clusters of enterprises with similar or complementary products can promote efficiency, increase market demand, and drive technological advancement. Moreover, since database of informal sector is unstructured and fractured, the application of knowledge management in this sector can attract investors and stakeholders.

The unorganized sector in India represents a substantial segment of the economy, encompassing diverse economic activities conducted by individuals and enterprises outside formal regulations. Characterized by informal employment, small-scale operations, and limited institutional support, the creation of jobs and economic contributions is greatly aided by the unorganized sector. In order to address a range of socioeconomic issues and advance equitable development, the Indian government has put in place a number of initiatives and programs in a variety of areas.

In order to examine how government initiatives affect the unorganized sector of Uttarakhand's financial inclusion, this exploratory study uses primary data. This study offers significant insights for policymakers and financial institutions seeking to enhance the role of government programs in promoting entrepreneurial development in the unorganized sector, as it focuses on the efficacy of certain policies and initiatives. Finally, the study highlights the critical connection between financial inclusion programs and the stability and prosperity of the unorganized sector.

The study looks into how government regulations affect the informal sector's use of technology, talent development, and financial access. The research intends to provide important insights into the adoption and efficacy of programs under financial inclusion initiatives in fostering entrepreneurial activities within this crucial and frequently marginalized sector of the economy. The study's findings are based on an analysis of experiences.

This research endeavours to elucidate the multifaceted interplay between socioeconomic factors, entrepreneurial endeavours in the handicraft sector, and the transformative influence of digital technologies. In an era where the global market is increasingly reliant on digital platforms, understanding how such technologies intersect with traditional handicraft businesses is paramount. By employing a comprehensive research approach, this study aims to investigate how socioeconomic conditions shape the landscape for handicraft entrepreneurs and, reciprocally, how the adoption of digital tools and platforms affects their economic prospects. Through an exploration of the challenges and opportunities faced by these entrepreneurs, the research seeks to uncover the ways in which digital integration can potentially bridge socioeconomic gaps, empower artisans, and contribute to the sustainable growth of the handicraft industry. The findings from this study hold the potential to inform policy interventions, business strategies, and digital literacy initiatives that can foster a more inclusive and economically resilient environment for handicraft entrepreneurs in the digital era.

Entrepreneurship is now acknowledged as a key driver of economic growth, sparking extensive research. It involves seizing opportunities and creating value through resource management, including risk-taking and innovation. Beyond economic growth, entrepreneurship fosters innovation, addressing societal needs and contributing to technological breakthroughs. It also plays a vital role in regional development, revitalizing local economies and promoting inclusivity. India has witnessed a significant rise in entrepreneurship, driven by economic growth, access to capital, and government support. Well-designed policies aim to reduce unemployment and promote entrepreneurial development, particularly in unorganized sector. India’s favorable factors, such as a growing market, advanced technology, and supportive policies, make it an attractive hub for entrepreneurship. Despite challenges, the future of entrepreneurship in India looks promising, with the government's relentless efforts and increasing global recognition. Entrepreneurship in India’s unorganized sector holds particular promise, with policies directed toward its growth. India’s entrepreneurial landscape is poised to shape the nation’s economic growth and global presence positively.

The digital era has brought a revolutionary period for entrepreneurship; it will change how companies run and execute their operations. The effect of the digital era on the entrepreneurial environment and entrepreneurship is thoroughly examined in this article. While investigating the potential difficulties or challenges given by the dynamic digital ecosystem, the research tries to explore the essential skills, traits, and characteristics needed for successful digital entrepreneur in unorganized sector of India. So that they can enjoy the benefit of digitalization.

The research explores the tricky connection between digital technology and entrepreneurial endeavors in order to meet the objective of study. It looks at how the initiation of the digital era has setup a conventional business structures and created new opportunities for creative and innovative micro entrepreneurs in unorganized sector. The study emphasizes the necessity of flexibility, technological know-how, and an out of the box thinking as essential qualities for success. This paper also offers light on the challenges faced by digital micro businesses such as cut throat competition, issues related to cyber security, and negotiating indistinct market dynamics. The incredible prospects provided by global market access, data-driven insight, and disruptive innovation are simultaneously explored in many ways.

This paper offers insightful analysis with some suggestions for aspiring and established digital micro entrepreneurs by using examples and case studies from the real-world situations. It provides methods for operating digital technologies, improving customer experience through personalization, and overcoming ethical issues in enterprises driven by AI. By examining potential technological advancements and their effects on the entrepreneurial terms, the study also creates predictions about future trends and changes in digital entrepreneurship which may provide useful insights. It will also discuss the effects of these developments on the gig economy and labor force while identifying growing industries and business forecasts for entrepreneurs. This study emphasizes the value of constant innovation and adaptability in the era of digital world in its conclusion. It inspires business owners or entrepreneurs to connect the revolutionary potential of digital technology in a responsible and customer-focused manner so that they enjoy the benefit of digital technology. This research serves as valuable resource for entrepreneurs who want to succeed in digital era.

This chapter focuses on a critical review of technology adoption in the unorganized sector in India. Initially, the chapter covers the current state of the unorganized sector in India through an empirical understanding followed by a brief review of the literature review on technology adoption. Subsequently, the chapter highlights some of the promising aspects of technology adoption in the unorganized sectors in the future while mentioning the pitfalls and roadblocks that may appear. Finally, the chapter guides future entrepreneurs by showcasing a strategic roadmap through the integration of a technology adoption cycle and how the same can be utilized in startup firms for success in the long run.

The Swavalamban Artisans Cluster Revival and Entrepreneurship Development Program (SACRED) sought to uplift rural women across Gujarat, transforming them into empowered craft entrepreneurs within Gujarat, India’s unorganized sector. This chapter highlights the project’s success through targeted interventions like credit support access and social security insurance, skill enhancement, and market linkages, culminating in the establishment of formal enterprises, and improved livelihoods for beneficiary artisans. Despite challenges like financial constraints and gender biases, project ‘SACRED’ achieved a remarkable increase in their annual incomes. Some of the listed case studies showcased the individual achievements of artisans, illustrating the project’s impact on their socio-economic, cultural, and psychological status. Moreover, the project contribution extended to the broader Indian economy, particularly in Gujarat, renowned for its rich artisanal heritage. This chapter underscores the potential of empowering marginalized groups and addressing systemic barriers to economic participation. By advocating for continued support, initiatives like SACRED can foster inclusive growth and drive lasting positive change in rural communities.

In rural India, the establishment of women-led Self-Help Groups (SHGs) is mainly motivated by the philosophy of women empowerment and holistic socio-economic growth. But this has been often noticed that the influence of such SHGs has often been limited to that of small-scale lenders, which is a large deviation from the idea behind the planning and establishment of these SHGs. Women-led SHGs have the potential to develop skilled workforce. But development of skilled workforce is not the major objective of the SHGs. Members of these SHGs often face business-related issues and to resolve these issues, they have to employ their business skills. The process of solving business-related problem develops entrepreneurial skills among the women members of SHGs, which, in turn, leads to greater self-reliance and leads the way to women empowerment. Most studies on women-led SHGs emphasized the financial improvements of the women and also the advancement in their technical skills. The present study aims to capture an image of the entrepreneurial skill gaps among the members of women-led SHGs. The research study was steered in three villages of Bhangar II block of West Bengal and members of women-led SHGs were the samples. The study identifies crucial skill gaps among the members of women-led SHGs and the discoveries of this study could be used to develop policies, which can reduce these skill gaps, develop better women entrepreneurs, and pave the way for women empowerment.

India's burgeoning population and inadequate employment prospects, entrepreneurship is the only viable option to escape the current unemployment crisis. In India, the unorganized sector employs a larger percentage of the workforce than the organized sector. The unorganized sector employs rural women in a variety of jobs, including agriculture, raising livestock, handicrafts, food processing, and other cottage industries. Women frequently serve as social change agents through their endeavors, questioning gender norms and promoting empowerment in their local communities. Government policies, NGOs, and private sector initiatives play a crucial role in fostering an enabling environment for their entrepreneurship. Promoting equitable and sustainable economic development in India requires aiding and abetting rural women entrepreneurs in the unorganized sector. Their precarious employment, low economic standing, lack of control over earnings, lack of bargaining power, inability to balance paid work with childcare responsibilities and homework, lack of institutional credit, training, and information access, and lack of assets are the main causes of their vulnerability. This paper aims to identify the role, problem, and future opportunities for rural women entrepreneurs. This paper highlights their development, expectations, and struggles. This research will contribute to a deeper comprehension of unorganized business operations and assist policymakers in crafting appropriate legislation that will safeguard these enterprises’ interests going forward.

The current chapter aims to know about sustainability, empowerment, inclusive entrepreneurship, especially women entrepreneurship in the unorganized sector. Moreover, this chapter emphasized in exploring the concept related to sustainability and its pillars. It also tried to understand the relationship between sustainability and empowerment by focusing especially on types of empowerment. Furthermore, this chapter tries to discuss empowerment and entrepreneurship. Along with this, it focused on understanding whether entrepreneurship and well-being are associated with each other before moving further in knowing about the journey of entrepreneurship in India. In addition to this, the chapter also tried highlighting women entrepreneurship in the unorganized sector. It is seen that women entrepreneurs are becoming empowered which is helping them in taking decisions for personal development, growth as well as social development because of better economic status resulting in holistic well-being. Also, women empowerment through entrepreneurship helps in developing leadership and entrepreneurship growth which positively contribute to economic growth.

Agroforestry is a multidisciplinary field that offers various outputs with multiple functions. While the market for crop components in agroforestry is well established, there is a lack of organized and dedicated supply chains for other outputs such as forage, timber, fuel wood, various nuts and minor fruits. This presents an opportunity to streamline and develop entrepreneurship in this sector. At present in India, only two incubation centres are working, one is at ICAR-CAFRI and another is at Tamil Nadu state agricultural university, and these centres are focusing on the development of entrepreneurship in rural India. The wood industry in India is experiencing rapid growth, positioning itself as one of the fastest-growing sectors. According to the World Bank, the organized wood market in the country is projected to expand by approximately 20 per cent annually in the coming years. To meet the demands of this industry, India has been importing wood and wood products, with the total value of imports in this sector exceeding 457 billion Indian rupees by the end of the fiscal year 2022. Currently, agroforestry plays a significant role in fulfilling of requirements of fuel wood (~50%), small-timber needs (~ 66%), plywood (70–80%), wood for paper production (60%) and fodder for livestock (9–11%). Additionally, agroforestry provides sustainable resources for getting households, including food, fibre, fruit, medicinal plants and various ecosystem services. Considering the potential capacity of agroforestry sector, it is appropriate to tap into the market potential. Here we elucidate the process of identifying the value-chain development and opportunities associated with this agroforestry sector while delving into the advantages and disadvantages of agroforestry in detail.

The handloom industry, deeply rooted in India for thousands of years, thrives on minimal capital and power, facing challenges in marketing, infrastructure, and finances. Nevertheless, it stands as the country’s second-largest employer, engaging over 3.5 million people in direct and allied activities and contributing significantly to global handwoven fabric markets. Emphasising its regional significance, Jharkhand is a key player in tussar silk production, holding a substantial 76.4% share in India. With 23.77 lakh looms, the industry is crucial for employment and production, underscoring its significance in India’s socio-economic landscape. Focused on self-employed handloom entrepreneurs in Jharkhand, this study explores their socio-economic conditions using both primary and secondary data. Secondary data were extracted from the fourth handloom census and government sources, while primary data were collected through a guided questionnaire from a sample of 50 self-employed handloom entrepreneurs in Godda and Saheb-Ganj districts. The survey results indicated a male-dominated (62%) handloom entrepreneurship scenario in Jharkhand. Despite low-income generation, around 88% earn less than ₹5000 per month, these entrepreneurs persist, being second or third-generation, providing employment locally. Distribution of work experience comprised 46% having more than a decade of experience, 36% possessing 5 to 10 years, and 18% holding 1 to 5 years of experience. The data also revealed a low awareness (0.9%) among entrepreneurs about support programmes, highlighting the need for increased awareness and targeted interventions. This study also shows a comparative discussion of the handloom industry among Bangladesh, India and the Indian state of Jharkhand. The study's findings provide valuable insights into the socio-economic and demographic features of self-employed handloom entrepreneurs, serving as a compass for potential solutions needed to enhance their overall well-being.