Non-corporate Small Business: Definition

It is the millions of proprietorship/partnership firms running as small manufacturing units, shopkeepers, fruits/vegetable sellers, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

Loosely referred to as the “unorganised” or “informal” sector, they are mostly self-organised.

Large portion of this sector runs as Own Account Enterprises (OAEs), with no employees … essentially self-employment.


The Small Business Sector or non-Coporate sector is truly vast and consists of 5.77 crore* unincorporated non-agricultural enterprises excluding construction, in rural and urban areas.

*The NSSO study of the non farming enterprises in 2010-11


These enterprises are all around us in cities big and small, and in districts and villages. And are economically active in a variety of ways in Manufacturing, Services and Trading.

*Key Results of Survey on Unincorporated Non-agricultural Enterprises (Excluding Construction) in India NSS 67th ROUND (JULY 2010 – JUNE 2011)

ownership structure

57% of all enterprises owned by Backward Classes in Urban India and 63% in Rural India making them the biggest source of employment for weaker section of society.

*Harvard Business Review - Caste and Entrepreneurship in India, October 18, 2011

largest contributor of India's GDP

The Small Business Sector accounts for 45% of India’s GDP, far ahead of every other sector of the economy. The Gross Value Addition is Rs. 6.28 lakh crore.

*Key Results of Survey on Unincorporated Non-agricultural Enterprises (Excluding Construction) in India NSS 67th ROUND (JULY 2010 – JUNE 2011)
**India UNINC. - Prof R. Vaidyanathan –Table2.1 page 16
largest employment generator

The 5.77 crore enterprises that constitute this sector employ 46 crore people. Of these Self-employed constitute 24 crore.*
This accounts for 90% of the Nation’s employment. Contrast this with the Corporate Sector where despite liberalisation and globalisation, employment increased only by 22 lakh in 20 years between 1991-2011 *12th Plan Doc on Employment and Skills Development

The Non-Corporate sector holds huge promise for entrepreneurship, self-employment and livelihood among the weaker sections.

The best way to ensure SCs and STs get employment is to promote them as entrepreneurs, like how the OBCs have done.

Promoting, assisting and financing entrepreneurship among SCs/STs is the surest way of lifting their economic status.** **Building Entrepreneurs in Daily Pioneer dated 23.3.2014, Prof Vaidyanathan

employment share of SC, ST, OBC and others

According to a Harvard Business School Study: “The SCs, STs and especially the OBCs have made significant progress at the level of political representation in independent India. The OBCs have made progress in entrepreneurship, but SCs and STs are considerably under-represented in the entrepreneurial sphere. That is, for SCs and STs, political gains have not manifested themselves in greater entrepreneurial prowess."

It means that the SC ST entrepreneurship has to be promoted.  *Sukhadeo Thorat Professor, Centre for the Study of Regional Development, Jawaharlal Nehru University, Delhi, and Chairman, Indian Council of Social Science Research The Hindu dated 30.11.2011
**Building Entrepreneurs in Daily Pioneer dated 23.3.2014, Prof Vaidyanathan