Rural India outpaced urban areas in establishment growth, registering a 20.5% year-on-year increase in Q4FY26 compared with 12.6% in urban regions. Across sectors, other services recorded the highest year-on-year growth at 24.8%, reaching 4.1 crore establishments in Q4FY26. Manufacturing increased by 14.5% to 2.5 crores, while trade grew 7.5% to 2.6 crores.
The report defines a service-sector establishment as an enterprise engaged in activities carried out for the benefit of a consuming unit, which may include individuals or other institutional entities.
Unincorporated enterprises are non-agricultural establishments not registered under the Companies Act, 1956 or the Companies Act, 2013.
Employment in the services sector climbed 31.1% year-on-year to 66.2 million in Q4FY26. Manufacturing jobs increased 10% to 40.6 million, while trade-related jobs grew 2.2% to 45 million.
Overall, employment during the quarter was higher than the 128.1 million recorded in 2025, as per data released by the statistics ministry.
“Many unincorporated units depend on casual labour, migrant workers, and helpers who often shift to seasonal agricultural work and return either as an entrepreneur or as a worker when activity in the sector strengthens, leading to a rise in employment and establishments,” the ministry said in a statement.Workforce profile, digital adoption
Women accounted for over 29% of the workforce in the January-March quarter, slightly higher than 28% a year earlier. The ministry said this reflects the sector’s growing role in creating employment opportunities for women and supporting inclusive economic participation.
Working owners continued to form the largest share of the workforce at 61% in Q4FY26 compared with 58.3% in the corresponding quarter last year. Meanwhile, the share of hired workers declined to 24.8% from 26.9%, while that of others, including unpaid family members, fell to 14.3% from 14.9%.
Digital adoption remained strong among the unincorporated sector, with around 81% of establishments using the internet for entrepreneurial purposes.
Nearly the same proportion had adopted cashless modes of transaction such as online banking, UPI, POS devices, and other digital payment mechanisms.