India’s job growth story has shifted dramatically thanks to rising self employment. A recent study by HSBC Bank shows that self employed workers are now driving a major part of the employment surge. Meanwhile, formal wage jobs are growing much more slowly, raising fresh questions about how to reduce unemployment.
The report reveals that self employment climbed from 239 million in FY18 to 358 million in FY24, growing at 7.0 per cent annually. In contrast, salaried jobs expanded only from 105 million to 119 million, at a modest 4.1 per cent rate. Casual labour grew even slower. The message is clear: to reduce unemployment, India must continue supporting self employment.
Labour force participation rises sharply
Labour force participation has also increased. The LFPR for people aged 15–59 rose from 53 per cent in FY18 to 64.3 per cent in FY24. Women’s participation reached 31.7 per cent, while men’s hit 58.2 per cent. As more women and youth look for work, many find that wage jobs are limited, so they turn to self employment. This shift plays a major role in cushioning unemployment.
Over six years, total employment increased by 155 million. Of that, female employment jumped by 103 million, almost twice the male increase. This shows that tackling unemployment requires understanding gender trends. Much of this rise has been supported by the booming self employment sector.
Non farm sectors drive employment gains
Non farm employment now makes up 54 per cent of India’s total workforce. Services added 41 million jobs between FY18 and FY24, construction added 20 million, and manufacturing added 15 million. In services, wholesale and retail trade, transport, hospitality, education, and communication led the expansion. Manufacturing growth was strongest in textiles, food and beverages, and metals. These shifts directly influence unemployment patterns and future economic planning.
SMEs strengthen the self employment wave
Small and medium enterprises also played a powerful role. SMEs contributed nearly 48 per cent of employment in both manufacturing and services. In the last two years alone, SME jobs in trade and services increased by 17 million. Strengthening self employment through SMEs offers one of the most effective ways to reduce unemployment.
Balancing self employment with formal jobs
Yet formal wage jobs remain relatively weak. This means unemployment continues to burden many who seek stable salaried roles. India must create more formal opportunities while supporting the fast-growing self employment ecosystem.
A path forward for reducing unemployment
In summary, the report makes it clear that self employment is driving India’s employment surge. But to tackle unemployment sustainably, India needs a balanced approach that promotes both wage roles and independent work across all sectors.
