Digital Transformation And Enterprise Performance in India : Evidence From Unincorporated Sectors

The unincorporated non agricultural sector in India is one of the greatest sources of employment, diversification of livelihoods and grass root entrepreneurship. Small establishments have been growing rapidly in digital adoption in recent years, which introduces a crucial aspect of the connectivity between productivity and creation of jobs. The paper discusses the trend of digital adoption, productivity and employment in the unincorporated sector of India, using the secondary data where the Annual Survey of Unincorporated Sector Enterprise (ASUSE), especially ASUSE 2023-24 and ASUSE 2025 have been used. The research discovers that the industry has grown to 7.92 crore establishments in 2025 with employment rising to 12.81 crore workers as compared to 7.34 crores establishments in 2023-24. The proportion of establishments that are using the internet also goes up during the same period to 39.4 percent as compared to a 26.7 percentage. The productivity of labour in terms of gross value added per worker also improved from ₹149,742 to 156, 539 at the current prices. The study argues that digital adoption is becoming a crucial factor for production, market access and enterprise resilience, yet its advantages are being subjugated by urban-rural inequality, small business size, low hired employment rates, low capital intensity and a different digital capacity. Policy will then have to go further beyond digital access to digital capability, affordable credit, platform-inclusion, enterprise-skilling and data-based-monitored.