New Delhi, June 30 -- India employs a vast share of its workforce in enterprises that most economists would hesitate to call 'firms.' The Annual Survey of Unincorporated Sector Enterprises (ASUSE) of 2025 counts 79.2 million unincorporated non-agricultural establishments in India. Yet this vast segment generates only 6.5% of national gross value added (GVA). A sector that large, contributing so little, is a story of structural entrapment more than entrepreneurship.

Most of these establishments are own-account units, family-run, often home-based, concentrated in retail, apparel and personal services. In many populous developing economies, such units function as a labour sink when formal jobs are insufficient. Why they remain stuck at low ...