Investing in real-time informal sector data, and bringing gradual formalization to the forefront of policy decisions can have large multi-year economic growth payback. Substantiate (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The lack of high-frequency real-time economic indicators make it hard to track India’s large informal sector, which employs 80% of the labour forceand produces 50% of the GDP.
· Wages, the main source of income for the landless, have been resilient over 2020-21, led by good monsoons and elevated reservoir levels.
· Cultivation is the main source of income for the landed. Strong monsoon and robust production are likely to have aided the incomes of the landed over 2020-21.
· Given the irrigation infrastructure is patchy, rural incomes depend much on the vagaries on monsoon rains.
· Need more diversification of income sources and higher agricultural productivity.
· The informal sector labour force of urban India, making up 20% of labour force, are employed across trade, hotels, transport, manufacturing, construction and others.
· The PLFS survey showed a rise in self-employment in urban areas. Another recently conducted survey showed that this category suffered the highest earnings loss.
· What is perhaps needed now is to protect the informal sector workers via social welfare schemes so that the disruption they are facing does not lead to a permanent fall in demand.
· There is a case of remaining generous with programmes such as the rural NREGA scheme for longer. India doesn’t have an equivalent urban social welfare scheme.
· But the success of those depends much on the health of the intermediariesIndia’s banking sector.
