Unraveling the Growth of Indian Entrepreneurs: A Closer Look

Unraveling the Growth of Indian Entrepreneurs: A Closer Look
Posted on 02-08-2023

Unraveling the Growth of Indian Entrepreneurs: A Closer Look

The vision of Atmanirbhar Bharat (Self-Reliant India) has been a prominent goal of the government, aimed at achieving self-reliance in various economic activities. To promote entrepreneurship and reduce reliance on the government for official jobs, several schemes have been implemented, offering funding, tax benefits, and regulatory support for startups and small businesses. Despite the government's claims of a surge in domestic entrepreneurs, reports indicate that India's labor market still faces joblessness and a lack of adequate employment opportunities, despite notable GDP growth. A closer examination of the employment data reveals a rise in the "business" category, primarily driven by self-employed entrepreneurs, raising questions about the actual state of entrepreneurship in India.

Employment Picture:

The Center for Monitoring Indian Economy (CMIE) data suggests that total employment in India as of January-April 2023 stood at 412.9 million, with an increase of 8.6 million compared to pre-pandemic levels. The major employment categories include farmers, wage laborers, small traders, salaried employees, and entrepreneurs/businessmen.

Shift in Employment Composition:

Within the "business" category, the rise in employment is primarily driven by self-employed entrepreneurs, comprising around 70-80% of all entrepreneurs in India. This group includes individuals engaged in businesses that don't heavily rely on financial capital, human capital, or professional skills. In contrast, the share of traditional businessmen, managing large businesses with capital and human resources, has decreased significantly, now accounting for only 15-20% of all business persons.

Reality of Entrepreneurship Growth:

While the growth in the self-employment category might appear encouraging, it raises concerns about the actual state of entrepreneurship in India. The rise of self-employed entrepreneurs may reflect a lack of better employment opportunities in the economy rather than a genuine surge in innovative and capital-intensive entrepreneurial ventures. The share of qualified self-employed professionals, such as doctors, lawyers, and consultants, remains relatively small at 1-2%.


The initiatives and policies introduced by the government have undoubtedly set the stage for entrepreneurial growth in India. However, a critical analysis of the data indicates that the bulk of the rise in entrepreneurship lies within the self-employed category, which may not accurately represent genuine entrepreneurship but rather the result of economic challenges and limited employment options. To achieve a thriving entrepreneurial ecosystem, there is a need to address the underlying economic conditions and create an environment conducive to fostering innovation, investment, and sustainable growth.

Thank You