 "A 10-per cent increase in employment and output in the informal sector is associated with a 16 per cent increase in employment in the formal sector")
Informal firms account for up to half of economic activity in the developing world. Contrary to conventional wisdom, their importance has not declined over the last several decades. The persistence of the informal sector has gone hand in hand with a faster pace of structural transformation and pro-poor economic growth.
India is no exception to these global trends. India’s informal sector accounts for over 80 per cent of jobs and 99 per cent of entrepreneurs in the manufacturing sector.
Even in highly industrialised states like Gujarat, jobs are expanding in the informal sector. India’s young demographics, and limited employment generated by the
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