Self employment in India:-

  • Nearly half of the labor force is self-employed in India.
  • In India a self-employed person is anybody who is working for oneself instead of working for a wage or salary.
  • Lack of suitable jobs and the lack of suitable avenues for investment, people opt for self-employment.


  • Selfemployment programs emerged as an important bridge from unemployment to sustainable economic activity
  • Advantage of small business
    • The self-employment involving activities on a small-scale is a good alternative to large scale business which has brought various evils like environmental pollution, development of slums, exploitation of workers, and so on.
  • Preference over wage employment
    • In self-employment there is no limit of earnings as is the case with wage employment. In self-employment one can use one’s talent for own benefit. The decisions can be taken quickly and conveniently.
  • Developing the spirit of entrepreneurship
    • Self-employment involves either no risk or very little risk. But, as soon as the self-employed person starts becoming innovative and takes steps to expand his business it becomes a launching pad for entrepreneurship.
  • Promotion of individualised services
    • Self-employment may also take the form of providing individualised services like tailoring, repair work, dispensing of medicines etc. Such services are helpful in providing better consumer satisfaction.
  • Reducing the problem of unemployment
    • Self-employment provides opportunities of gainful occupation to those who otherwise remain unemployed. Thus it reduces the problem of unemployment.
  • An entrepreneur is not just creating self employment but also building a structure for small to large scale employment. As these enterprises grow, the employment opportunities increase. In India, many start-ups that started out as home based ventures are today employers to hundreds of individuals.
  • Women who are self employed are financially secure leading to growing role of women in India’s labour force and shift towards gender equality.
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  • Self employed are mostly part of informal economy with no necessary protection.
  • It is relatively easier to evade taxes for the self-employed than in the case of true entrepreneurs who operate with the help of independent-minded professionals, possibly on a large scale, which makes tax evasion difficult.

What needs to be done:-

  • India needs to reduce bad self-employment by massively creating formal, non-farm, wage employment and good self-employment. There need to be reforms of building infrastructure, reducing regulatory control, and raising human capital.
  • Reforms in labour laws ,education needs to be undertaken immediately for encouraging good self employment.

Source – Livemint