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Home-Based Enterprises in India


India, a land of vibrant culture and entrepreneurial spirit, thrives on the ingenuity and resourcefulness of its people. Amidst the bustling streets and urban landscapes, there lies a significant yet often overlooked segment of the economy – home-based enterprises. These businesses, operated from the comfort of one's home or nearby premises, constitute a crucial component of India's economic fabric, contributing to employment, productivity, and overall economic growth.


1. Evolution of Home-Based Workforce

Over the past few decades, the landscape of home-based enterprises in India has witnessed both growth and flux. According to data sourced from the National Sample Survey, the number of home-based workers stood at approximately 47.14 million in 2004-05. This figure saw a modest increase to 49.20 million by 2011-12. However, a noticeable decline was observed in 2017-18, with the estimated count dropping to 41.85 million. Despite this fluctuation, home-based work consistently accounted for a significant portion of total employment, comprising 11% in 2004-05 and maintaining the same percentage in 2011-12. Even in 2017-18, when the numbers dwindled, it still represented 9% of total employment.


2. Productivity Dynamics

A critical aspect of home-based enterprises is their productivity and efficiency. Studies utilizing National Sample Survey data shed light on this aspect. It was found that both labor and capital productivity of home-based enterprises lagged behind their counterparts operating in non-home settings. However, there was a glimmer of hope post-2010-11, as total factor productivity growth showed improvement, albeit remaining lower than non-home-based enterprises. These findings underscore the need for nuanced policy interventions to enhance the productivity of home-based enterprises.


3. Role in the Informal Sector

Home-based enterprises are quintessential components of India's informal sector, which encompasses approximately 90% of the country's workforce. Despite their informal nature, these enterprises play a pivotal role in generating employment opportunities and contributing to the Net Domestic Product (NDP). They serve as lifelines for many households, providing avenues for supplemental income and economic resilience.


4. Policy Implications

The significance of home-based enterprises in India's economic landscape necessitates strategic policy initiatives. Policymakers need to delve deeper into understanding the dynamics of these enterprises to formulate effective strategies aimed at bolstering their productivity and sustainability. While recent self-employment policies have been proposed, the efficacy of these measures remains questionable in light of the productivity challenges faced by home-based enterprises.

In essence, home-based enterprises embody the spirit of grassroots entrepreneurship in India. Their contribution to employment, particularly in the informal sector, underscores their significance in driving economic growth and fostering inclusive development. As India charts its course towards economic prosperity, it must harness the potential of home-based enterprises through targeted interventions and supportive policies. By nurturing this vibrant ecosystem of entrepreneurship, India can unlock new avenues of growth and opportunity for its citizens, thereby realizing its vision of a thriving, resilient economy.


Through the lens of home-based enterprises, we glimpse not only the resilience of Indian entrepreneurship but also the boundless potential that lies within the confines of humble abodes.




WIEGO Statistical Brief on Home-Based Workers in India

Productivity and Efficiency of Home-Based Enterprises in India

Home-Based Enterprise and Housing Policy: Evidence from India and Indonesia