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India's small businesses spanning the manufacturing, trade and services sectors added about 11 million jobs in the year to the end of September, with total employment rising to 120.6 million from 109.6 million the previous year, though wage growth was limited by high inflation.
Job creation remains a major challenge for Prime Minister Narendra Modi despite the economy growing at an average annual rate of more than 7 per cent over the last decade, and unemployment among young people remains persistently high.
The number of small manufacturing businesses, mainly family- owned units such as garment makers, auto component makers and food processing enterprises, grew to 20.15 million in the 2023/24 year from 17.83 million the previous year, the government report released on Tuesday showed.
Meanwhile, the total number of small businesses across manufacturing, trade and services grew to 73.4 million from 65 million a year earlier.
The survey covers the period from October 2023 to the end of September this year.
"The unincorporated non-agricultural sector, comprising small manufacturing, trade and other services, plays a crucial role in the economy... contributing significantly to employment," said Saurabh Garg, secretary at the Ministry of Statistics, while releasing the finding of the annual report.
During the survey period, the number of small businesses grew by 12.84 per cent, while employment showed robust growth of more than 10 per cent, Garg added.
However, wages were affected by inflation. The average annual wage in nominal terms per hired worker rose 13 per cent in 2023/24 to 141,071 rupees ($1,656), reflecting a modest increase compared with annual retail inflation of about 5.5 per cent.
Wages at small businesses, often located in rural areas and urban slums, remain much lower than the national average per-capita income of about $2,800.