Key Insights from the State of India’s Livelihoods Report 2025 on Inclusion, Credit Access, and Digital Gaps
Introduction
The State of India’s Livelihoods Report 2025 (SOIL 2025), published by ACCESS Development Services, provides a critical examination of India’s evolving livelihood ecosystem amid economic recovery, digital transformation, and climate challenges. Amid expanding government schemes like PMEGP, NRLM, and Mudra, the report underscores persistent inequities for marginalized groups, particularly Scheduled Castes/Tribes (SC/ST) and rural women entrepreneurs.
Despite over 147 livelihood initiatives, these groups face structural barriers in Micro, Small, and Medium Enterprises (MSMEs), limiting their transition from subsistence to sustainable enterprises. Drawing from chapters on policy responses (Ch. 2), jobs and employment (Ch. 6), women’s participation (Ch. 8), and technology (Ch. 10), this report synthesizes key findings, revealing how schemes often prioritize coverage over transformative impact. With 81.9% of the workforce informal and self-employment rising to 58.4% in 2023–24, the stakes are high for inclusive growth.
Participation and Representation: Underrepresentation Amid Growth
SOIL 2025 highlights stark disparities in MSME and livelihood participation. SC/ST entrepreneurs constitute just 22.3% of Prime Minister’s Employment Generation Programme (PMEGP) approvals, despite comprising 16.6% of the population, and are often confined to low-value, traditional activities like handicrafts.
Loans for SC/ST-led enterprises average 30% smaller than the national mean (₹4.8 lakh for micro-MSMEs), with lower three-year survival rates of 58%.
In agriculture, only 16% of PM-KISAN’s ₹6,000 annual beneficiaries are SC/ST, against 24% of farm households, exacerbated by 20.9% ineligibility due to audits and exclusion of 38% eligible tenants/sharecroppers from documentation barriers.
Rural women fare no better, with Female Labour Force Participation Rate (FLFR) at a dismal 41.7% in 2023–24, and Not in Education, Employment, or Training (NEET) rates double those of men. They dominate agriculture (64.4% of workers) but earn one-third of male counterparts, with real wages declining 32% for self-employed women.
In MSMEs, women-led enterprises number 34 lakh on e-commerce platforms, but SHGs (Self-Help Groups) own only 3.7% of establishments, concentrated in states like Andhra Pradesh and Odisha (10%+). National Rural Livelihood Mission (NRLM) reaches 10.05 crore women via 90 lakh SHGs, yet non-farm enterprise involvement is limited to 2.1 million members, with credit linkage varying wildly—₹78,000 per SHG in Bihar versus ₹3.4 lakh in Tamil Nadu.
| Category | Key Statistic | Disparity Insight |
|---|---|---|
| SC/ST Entrepreneurs | 22.3% PMEGP approvals; 30% smaller loans | Concentrated in low-productivity sectors; 55% in casual wage work |
| Rural Women in MSMEs | 43% Mudra loans for consumption; 1/3 male earnings | 73% FPOs lack management; 31% viability rate |
| Overall Informal Workforce | 81.9% informal; 90% in rural areas | Youth unemployment 10.2%; SC/ST overrepresented in poverty traps |
These figures from Ch. 6 and Ch. 8 illustrate a “missing middle” in formal MSMEs, where SC/ST and rural women capture less than 20% of credit despite schemes’ scale.
Expanding Schemes: Coverage vs. Depth
India’s policy arsenal has ballooned, with Ch. 2 detailing shifts from recovery (post-2023) to resilience (2025). For SC/ST, Stand-Up India and Van Dhan Kendra provide targeted support—e.g., 25% capital subsidy up to ₹25 lakh via National SC-ST Hub—while TRIFED’s MSP for minor forest produce aids tribal livelihoods. PMEGP approved 1.03 lakh projects in 2023–24, generating 8.25 lakh jobs at ₹18.7 lakh average cost, with SC/ST quota at 22.3%.
Rural women benefit from NRLM/DAY-NRLM (₹1.89 lakh crore bank credit, 2.4% NPAs) and women-centric initiatives like Mudra (43% loans to women, though often non-enterprise) and PM SVANidhi (₹13,797 crore to 68 lakh vendors).
Tech-enabled schemes shine: Amazon Saheli empowers 1.2 lakh women (+45% income), Flipkart Samarth supports 5 lakh artisans, and Sakhi Project forms 2,100 SHGs with ₹40 lakh turnover. Broader MSME tools include Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), GeM (₹5 lakh crore GMV, 23 lakh sellers), and ONDC (20.4 crore transactions). Digital innovations like AGRISTACK (14 crore farmer records) and Rural UPI (489 million users, ₹3.2 lakh crore transactions) aim for inclusion.
CSR complements this, with livelihood spending surging 742.4% (FY2014–24), including ₹501.39 crore for NRLM SHGs. Yet, Ch. 2’s Table 2.2 reveals challenges: MGNREGS allocations rose to ₹86,000 crore (2024–25), but only 12% focus on agricultural enhancement, and 61% assets are non-functional.
Persistent Barriers: Structural Hurdles Undermining Schemes
Despite proliferation, SOIL 2025 exposes why barriers endure. For SC/ST entrepreneurs, caste-based exclusion persists: smaller loans reflect lender biases, while informalization traps 55% in casual work with high poverty.
Documentation hurdles exclude tenants, and aspirational districts see diluted impacts. Rural women grapple with intersecting vulnerabilities—childcare deficits force 1/3 to exit the workforce annually, with 97% citing proximity and development needs; affordability gaps (₹12,000–15,000/year) hit low-income households hardest, as only 25% men share care (vs. global 70–90%).
In MSMEs, credit gaps loom large: Micro-enterprises (95% of MSMEs) access 31% of funds at 18–24% FinTech rates, with 67% informal and facing KYC/Android barriers. Digital divides exacerbate this—31% rural 4G gap, 46% smartphone penetration, 38% literacy—leading to 12% algorithmic loan rejections.
Gender wage disparities and low FPO viability (31%) compound issues, while climate shocks affect 14% adopting resilient practices. Migration adds layers: 100 million rural migrants (many SC/ST) fill urban informal jobs, facing domicile ties and violence.
Ch. 10 flags tech pitfalls: 67% gig income volatility for 45 lakh delivery partners; automation risks in high-growth sectors. Overlaps in 147 schemes cause inertia—e.g., unspent BOCW funds (₹65,967 crore)—and urban skew (top 5 states capture 43% CSR, North East <1%).
Fiscal constraints and weak monitoring perpetuate a relief-over-productivity focus, leaving SC/ST/rural women in low-quality self-employment.
Recommendations: Towards Transformative Inclusion
SOIL 2025 advocates consolidation (Lesson 2): Merge schemes into integrated packages with simplified approvals and risk-sharing finance (Lesson 4). For SC/ST, prioritize mentorship, market integration, and tribal/PVTG models (Lesson 25, 27).
Rural women need childcare incentives—blended financing, tax credits, micro-AWCCs—and gender-responsive fintech (vernacular interfaces, device subsidies). Ch. 8’s Figure 8.1 outlines seven empowerment drivers: Access, skills, childcare, norms, safety, voice, time—urging NSQF-aligned curricula and RPL.
Broader calls include PPPs for skilling/infrastructure, liberal CSR for SC/ST/transgender, platform laws, rural 5G priority, and AI ethics. Embed climate resilience (Lesson 30) via parametric insurance (5.2 crore farmers covered) and adaptive institutions with rigorous evaluation. Rights-based security—extending ESIC/EPFO, minimum earnings—could bridge informal gaps.
Conclusion
SOIL 2025 paints a sobering picture: Expanding MSME and livelihood schemes have scaled coverage—e.g., 29.5 crore e-Shram registrants—but persistent barriers for SC/ST and rural women entrepreneurs stifle equity. Underrepresentation, digital/climate vulnerabilities, and implementation silos trap them in informality, undermining India’s 8% GDP growth ambitions.
Urgent, ecosystemic reforms—finance, tech, care, markets—are essential to convert schemes into mobility engines. As the report warns, without addressing caste-gender intersections, resilience remains elusive for the most vulnerable. Policymakers must act decisively, leveraging CSR and NGOs for scaled, monitored impact. (ambedkarchamber.com)
