Odisha and Uttar Pradesh, two states with large footprints in India’s unincorporated business sector, rank at the bottom among major states in terms of per capita emoluments paid to hired workers, even as Uttar Pradesh employs the largest share of workers in such enterprises, according to a report by SBI Research.
The study, based on unit-level analysis of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, highlights a sharp disparity between employment generation and worker earnings across states in India’s vast informal non-agricultural economy.
Uttar Pradesh accounted for 12.2 per cent of hired workers in unincorporated enterprises, the highest among all states, followed by Maharashtra at 10.7 per cent and Tamil Nadu at 9.7 per cent, SBI Research said.
However, Uttar Pradesh recorded per capita emoluments of only Rs 108,861 per hired worker, well below the all-India average of Rs 146,550. Odisha ranked even lower at Rs 105,335, making it the lowest-paying major state in the survey.
“Odisha and Uttar Pradesh fall at the bottom of the ladder among major states in case of per capita emoluments,” the report said.
In contrast, Uttarakhand paid the highest per capita emoluments at Rs 214,237, followed by Kerala at Rs 198,204 and Telangana at Rs 190,390.
The findings come at a time when India’s unincorporated non-agricultural sector continues to expand its contribution to employment and economic activity. According to the report, the number of workers in the sector increased to 12.81 crore in 2025 from 12.06 crore in 2023-24, while the number of establishments rose to 7.92 crore from 7.34 crore over the same period.
The sector includes enterprises operating outside the corporate structure and covers manufacturing, trade and services activities excluding agriculture.
SBI Research said emoluments per hired worker across the country increased to Rs 1.47 lakh in 2025 from Rs 1.25 lakh in 2022-23, representing cumulative growth of 17.4 per cent over the period.
Yet the state-level data indicate that gains have not been evenly distributed.
Uttar Pradesh also contributed 11.7 per cent to the gross value added (GVA) generated by unincorporated enterprises, the second-highest share among states after Maharashtra’s 11.2 per cent. Despite this sizeable economic contribution and workforce participation, worker earnings remained among the lowest.
Odisha contributed 2.3 per cent to sectoral GVA and accounted for 2.8 per cent of hired workers, while recording the lowest per-worker emoluments among major states.
The report noted that the unincorporated sector’s share in India’s total GVA increased from 9.9 per cent in 2022-23 to 11.2 per cent in 2025, underscoring the growing importance of micro and small enterprises in economic activity.
SBI Research also found that digital adoption is helping improve productivity and formalisation within the sector. Enterprises with higher adoption of information and communication technology (ICT) recorded significantly stronger labour productivity and were more likely to be formally registered.
According to the analysis, a one-unit increase in the ICT adoption index was associated with a 76 per cent rise in labour productivity. Greater digitalisation also increased the likelihood of enterprise registration, which in turn improved access to formal credit.
The report recommended expanding affordable digital infrastructure, improving digital skills, promoting enterprise registration and strengthening access to institutional finance to support productivity growth and formalisation across India’s unincorporated business sector.
The unincorporated sector remains a major source of livelihoods, with SBI Research estimating that it accounts for 12.8 crore informal workers in industry and services and forms a critical pillar of employment generation in the country.
