India To Launch First High-Frequency Index For Informal Economy

India's Ministry of Statistics and Programme Implementation is working on an index to track the performance of unincorporated enterprises, a move that would give policymakers and economists their first high-frequency window into a sector that employs over 128 million people but currently shows up only in annual surveys.

Reportedly, the ministry is aiming to launch the index well ahead of the official 2031 target. No precise date has been publicly committed to.

Why The Index Matters

India's existing high-frequency economic indicators focus almost entirely on the formal economy. The Index of Industrial Production tracks organised industrial activity. Listed company financials capture corporate India. The informal sector, which runs on unregistered, non-company establishments operating outside the Companies Act framework, gets measured only through the Annual Survey of Unincorporated Sector Enterprises, which produces data with a significant lag.

The proposed index would change that by producing periodic updates, monthly or quarterly, on how unregistered businesses are performing. It would be the first indicator of its kind in India.

How Big The Sector Actually Is

The informal economy is not a footnote. According to the Annual Survey of Unincorporated Sector Enterprises 2025, the number of unincorporated establishments grew 8% to 79.2 million from 73.4 million in 2023-24. Employment in the sector rose to 128.1 million from 120.6 million over the same period.

More recent quarterly data points to even faster expansion. Unregistered enterprises grew 16.7% year-on-year to 91.7 million in the March quarter of FY26, while employment climbed 15.5% to 151.7 million. A sector growing at that pace deserves a dedicated tracking tool rather than an annual survey that arrives months after the fact.

The Technical Challenges

The Technical Advisory Committee on Index of Industrial Production has flagged that building a stable index for the unincorporated sector is harder than it sounds. The Annual Survey of Unincorporated Sector Enterprises does not use a panel-sampling design, which makes constructing consistent time-series data more challenging.

The committee recommended studying survey results over a period of time before committing to a production index for the manufacturing segment of the sector.

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Part Of A Broader Statistical Reform Push

The informal economy index is one piece of a larger overhaul of India's statistical infrastructure. The new Consumer Price Index series with base year 2024 was released in February. The new Gross Domestic Product series with base year 2022-23 followed later the same month. The new Index of Industrial Production series with base year 2022-23 launched on 1 June 2026. An Index of Services Production is being launched from July on a trial basis. An Integrated Official Business Statistics Portal is planned for 2027.

Sources:

Economic Times

Money Control