In this article, we will discuss Informal Economy in India. So, let’s get started.
Informal Economy in India
- An Informal economy represents enterprises that are not registered, where employers do not provide social security to employees.
- In many parts of the developing world, including India, informality has reduced at a very sluggish pace, manifesting itself most visibly in urban squalor, poverty and unemployment.
- Despite witnessing rapid economic growth over the last two decades, 90% of workers in India have remained informally employed, producing about half of GDP.
- Official Periodic Labor Force Survey data shows that 75% of informal workers are self-employed and casual wage workers with average earnings lower than regular salaried workers.
- Combining the ILO’s widely agreed upon definition with India’s official definition (of formal jobs as those providing at least one social security benefit — such as EPF), the share of formal workers in India stood at only 9.7% (47.5 million).
