India’s Informal Sector - The Feeder Economy Within

India is home to the largest informal economy in the world. Since such economies existed long before the term was invented, it may as well hold the double distinction of being one of the oldest ones too. While the business press takes the collective gaze elsewhere – to an organised sector – a troubling question remains: what fuels its growth? Way back in 2016, the Sixth Economic Census ¹ had already revealed that 95 per cent of firms have fewer than 5 wage workers, and that between 1990 and 2013-4, the average workforce in a firm fell from 3 to 2.2. ² Now in 2024, another voluminous report the Annual Survey of Unincorporated Sector Enterprises (ASUSE-24) - nested in the Ministry of Statistics and Programme Implementation - confirms the obvious: that India’s unrecognised engine of progress is its ubiquitous informal economy. 

Around 86 per cent of those employed have work-arrangements which lie outside formal contractual frameworks.

Liberalisation unleashed a mighty torrent of tiny firms, very few of which are able to grow from rags to the riches celebrated in the media. Anushree Sinha’s work showed that it is this informal economy that drives both growth and jobs. ³ And official data reveal an overlooked and silenced reality that around 86 per cent of those employed – including in hi-tech, in private corporates, and in the entrails of the state – have work-arrangements which lie outside the formal contractual framework of labour law with no, or compromised, work rights. ⁴ Despite over a century of struggle, at about 10 per cent, the unionised part of India’s labour force is small. In turn, just three quarters of it, mostly in the public sector, is covered by social security. 

Dating back well before Independence, the state’s thick skein of economic regulations has been knitted together by business lobbies keenly vested in minimising labour costs. They succeeded in getting size thresholds set for regulation which encourage the apparent miniaturisation of larger business alliances. ⁵ These deliberately miniaturised firms reinforce the petty capital that multiplies through self-employment and small family businesses. ⁶ ‘Small’ and ‘marginal’ have been overdetermined. 

The many shades of informality

For Indian statisticians this huge economy is but a sector - it is classified as ‘unorganised’ but it is far from disorganised. ⁷ Meanwhile, despite heavy criticism, the term ‘informal’ sticks obdurately to the unorganised sector since everyone, expert or not, thinks they understand what it means. Colloquially and technically it is a fuzzy term, one with multiple meanings. One consequence of having many meanings is that despite agreements on the term, with disagreements about its precise meaning, there is ample space for misunderstanding when writing and talking about it. So, in practice there is no consensus. Another consequence is that since technical experts on the economy do not agree on how the term relates to their professional vocabulary, what it is or how it is to be handled are questions that they residualise. 

All these relations of informality can co-exist and prosper in an economy that is socially segmented - as India’s is.

The informal economy has been subject to theorising which has the contradictory characteristics of being cumulative, historically specific, and short lived. The informal economy is theorised to consist of small units expected to disappear; it is entrepreneurial activity in the context of insecure property rights; it is structurally functional for larger businesses; it is low-cost labour inside the state, in corporate or registered private enterprise, and now in the gig economy. ⁸ Research tends to be partisan. All these relations of informality have been theorised as mutually exclusive but they can co-exist and prosper in an economy that is socially segmented - as India’s is. 

Then, throughout the entire world, as John and Jean Comaroff, anthropologists of criminality, have concluded, ‘lawlessness is the presumption’; ⁹ regulation is not simply legally avoided, it is illegally flouted. The question is not whether a criminal economy exists – it does and is long-standing, extensive, and active – but what is ‘Indian’ (or Chinese, or American…) about it. As James Butler quotes at the end of his essay on the enquiry into the 2017 Grenfell Tower fire disaster in London (the best current example of the deep penetration of criminal and informal activity into the British economy and polity [ London Review of Books, 10 ^th October 2024]), “the system isn’t broken, it was built that way”. 

In India these days it is clear that an upright citizen can run a firm registered with local authorities, can have a bank account (at times more…) as well as unregistered sources of credit, and will, if necessary, have a board or a neon sign with essential information. But employers know little about labour laws, let alone how they are enforced; in construction, their store had a cursory inspection for buildings standards laced with a tip. Such citizens never see that one official per district from the Pollution Control Board, who anyway lacks transport, and without forfeit they expel their growing non-biodegradable waste into public space or choked drainage networks. They may tap electricity from tangled poles; their accounts are stored in their heads and/or flutter around in shards of notepaper and/or are written in ledgers hidden from public view. ¹⁰ They pay taxes with reluctance, if at all, enhanced by maximal delays. New terms for this state of affairs include Aseem Prakash’s ‘hybrid state’ and Aniket Aga’s ‘graded informality’. ¹¹ These researchers also develop their concepts with allusions to the ways in which many kinds of social status are mobilised to express the economic forces and practices which shape this economy. Religion, caste, patriarchy, occupation-related business politics, and the effect on market behaviour of the physical and social characteristics of ‘things’ (commodities and services) are the best understood ways in which the economy is socially embedded. ¹² Lucia Michelutti’s team prefers ‘intreccio’ for South Asia as a whole – an Italian term derived from Mafia studies for the tangle of relations between criminalised and informalised markets and the bureaucratic architecture of the state. ¹³ Yet another is ‘selective informality’. 

Defying binaries

This last neologism has the advantage of drawing attention to the crenelated frontiers of micro-political economy which complicate the binary of ‘formal’ and ‘informal’ and which frustrate binary pigeonholing, but which do not disappear if ignored. It encapsulates the economy, which I have studied through fieldwork over the last half century, and the behaviour of the upright citizen above. It invites scholars, policymakers, and political leaders invested in both near- and long-term social transformations to re-think the exact reasons why rules and regulations mandated by the state are selectively enforced by the very same state and why they are cherry-picked by firms – and even by labour – be it for either compliance or resistance. 

Such questions are special cases of more general ones: Why policies in theory backfire in practice. Why victims become beneficiaries. Which policies are laid passively to rest and oblivion, which are actively laid down in layers like geological sediment and which erupt like successful volcanoes. These decades-old preoccupations of public policy are not helped by the fact that responses to them require evidence that has never existed in the form of data. Case material addressing such questions is limited, specific, and varied. Because policy experts have come to require valid policy-relevant empirical evidence to be packaged in particular containers (big data and extensive surveys in typologies consistent with international accounting classifications fit for models and formalised scenarios etc.), other kinds of information are ignored. When India signs treaties setting future goals for cultural property, trade, climate etc., how does the state deal with the rampant and selective informality in which it participates? 

By clubbing a multiplicity of informal operations definitively under ‘enterprise’, a live debate among scholars of informality is diminished.

In 2009, the United Progressive Alliance (UPA) government closed down the National Commission on Enterprises in the Unorganised Sector (NCEUS) which since 2005 had produced seven significant reports on the unorganised sector and addressed Lenin’s enduring question ‘what is to be done?’. After a hiatus, these Reports are now housed at the website of the Development Commissioner, MSME [Micro, Small and Medium Enterprises]. ¹⁴ In effect, by clubbing a multiplicity of informal operations definitively under ‘enterprise’, a live debate among scholars of informality is diminished. It concerns the question whether self-employment is independent and/or capable of enterprise or whether it is better understood as wage labour in disguise. The different implications for public policy and labour activism, which the NCEUS had vigorously discussed, are also cast out like waste. ¹⁵ 

A decade of patchwork 

In 2014, in para 102 of the Bharatiya Janata Party’s (BJP) first Union budget, Arun Jaitley gave the Finance Ministry three months to “examine the financial architecture” and to “to formulate concrete suggestions” for the Small and Medium Enterprises, most of which are ”Own Account Enterprises” and “are owned or run by SCs, STs and OBCs” [Scheduled Castes, Scheduled Tribes, and Other Backward Classes], and form “the backbone” of India’s economy. ¹⁶ In its subsequent decade in power, the BJP has sequenced efforts to formalise the informal ‘sector’ through quashing it – notably through the volcanic demonetisation of late 2016, the sedimented Goods and Services Tax reforms of 2017, ¹⁷ the new (admittedly stalled) labour codes in 2019-2020, and the government’s responses to the COVID-19 pandemic after 2020. There is sufficient published analysis of all these events to show that they have not met with anything other than very isolated success – if only through the lack of alternative absorptive capacities for livelihoods in the wake of policy-induced bankruptcies. ¹⁸ In fact the government faces a consensus among those watching the informal economy that the latter has not diminished in extent or importance but that instead of being transformed, it survives waves of constraints experienced as harassment. 

The informal economy has not diminished in extent or importance but is being transformed.

What small business says it wants over and above credit and commercial skills, are safe sites and infrastructure: not just roads, transport and communications for their raw materials and finished products but also reliable power, water, plus drainage, sewerage, and secure disposal of their waste. ¹⁹ As has been suggested for coming up for two centuries, this means attending to local municipal governments and the cultures of fiscal non-compliance shaping their revenues and their politics. What ‘organised unorganised’ labour says it wants over and above a just minimum wage and enforced decent work conditions to replace the extractive work-relations through which India’s capital is served, are forms of security outside work – in housing, food, health-care and education. ²⁰ Just as William Beveridge argued against his ‘great evils’ back in the colonial metropolis in 1942, so for India over the decades since Independence, ²¹ this is not only an infrastructural project, it also means a functioning welfare state. Over and above minimal registration which already exists, it is not clear that these projects in tax, in local government, infrastructure, and welfare need a new sediment of regulative legislation. Existing laws need enforcement and reasons for the latter’s selective lack of capacity need research. 

ASUSE and its revelations

It is with all this in mind that the series of ASUSE reports about the subset of the informal economy comprised by firms and labour constitute important markers for those invested in the future of India’s political economy. Published in mid-2024 and introduced at the start of this essay, ²² some of these still remain publicly available, mostly concerned with the inevitable minutiae of classification and of field survey methods. ²³ They have been condensed into a factsheet here: www.mospi.gov.in/sites/default/files/publication_reports/ Factsheet_with_infograph_A4.pdf. This factsheet can be read as a report card covering the post-COVID-19 period from 2021 to 2023. But, together with the NSSO’s comprehensive report on the Economic Characteristics of Unincorporated Non-Agricultural Enterprises (excluding Construction) in Indiaof 2015-16 (henceforth NSSO), they point to trends during the first decade of BJP government. These trends have political salience because MSME’s were widely argued, a generation back, to constitute a significant base of electoral support for the rise of the present government. ²⁴

What do ASUSE and NSSO cover? The informal economy of the new India is paraphrased by yet another concept, that of ‘un-incorporation’, an overlapping vantage point to informality. Unincorporated entities refer to a range of forms of organisation: self-employment (or ‘sole proprietorships’) and partnerships together with registered entities such as co-operatives and Self-Help Groups (the latter amounting to just 4 per cent of total unincorporated enterprises in 2022-23). The data are so richly abundant that what is missing needs to be flagged. Consequential sectors are missing. Agriculture, dominated by self-employment on miniaturised holdings is missing – so is livestock, though this huge sector does appear in ASUSE’s on-line field manuals and certainly includes unincorporated enterprises by ASUSE’s definition. Construction is absent, despite its teeming with such enterprises which help to contribute 10 per cent of GDP. So is mining. So is the private provision of public utilities. ²⁵ 

By 2022-23, in the unexcluded sectors of the non-farm economy, ASUSE extrapolates there to be 65 million ‘unincorporated’ firms, just under half in urban settlements. ²⁶ Two thirds are entirely unregistered from no fewer than 9 basic Acts and authorities charged with licencing. ²⁷ This unincorporated, mostly informal economy, in particular in its urban expression, is a far more important space for the economic mobility and social aspiration of OBCs than is the state with its patchily implemented reservations. ²⁸ Over half the firms (52 per cent) are owned by OBCs (with 52 per cent of the population) ²⁹; while SCs own 13.2 per cent (slightly under their population share) and STs at a paltry 4.4 per cent, own a proportion of firms that’s only half their share of the population. ³⁰ 

The informal economy is a far more important space for the economic mobility and social aspiration than is the state with its patchily implemented reservations.

These firms employ a workforce of 110 million labourers, just over half being ‘urban’. With an average of 1.7 labourers per firm, including unpaid family workers, the miniaturisation of firms (here called ‘entities’) comprising the Indian economy seems to have continued apace. But an astonishing 85 per cent of unincorporated firms declare no wage labour force at all and appear as self-employed. ³¹ The tomato seller [in the photograph] is one such. The 15 per cent of unincorporated firms that do employ wage labour will have a work-size distribution merging with that of incorporated firms, for its average would be in the region of 11. For context, in 2023, there were 1.7 million formally registered and active ‘companies’ employing 31 million workers, hence averaging 18 per firm. ³² 

In terms of sheer numbers, the lion’s share of the unincorporated firms – 38 per cent – were in ‘other services’ implying that trade (35 per cent, dominated by retail) and manufacturing (27 per cent, dominated by garments) somehow also provide ‘services’. One has long known not just that India is developing as an economy of capitalist services but also that ‘services’ is a dustbin category giving a resting-place to activities as varied as banking, healthcare, entertainment and education, call centres, domestic cleaning, and verge-side repairs. At half of GDP, one might have expected a larger numerical proportion to have been services. By contrast when manufacturing contributes but 13 per cent to GDP, it is relatively well represented in unincorporated firms. 

While averages conceal the range of a distribution, the 2022-23 survey reported in ASUSE-24 finds that these firms are small, on average generating an annual gross value addition (GVA) of Rs. 1.4 lakh per worker and Rs. 2.4 lakh per firm ³³ – most in trade and least in manufacturing, and in every sector over twice in urban sites the GVA of rural ones. ³⁴ Two comments may add to our picture here: first that it has not been accepted public knowledge that the size criteria for MSMEs are giant compared with the size distribution of most small firms. ³⁵ ‘Small’ in the ASUSE survey seems to be in the region of 50 times smaller in gross output and perhaps about 20 times smaller in assets than the average official ‘micro’ enterprise. ³⁶ Maybe this is why the term “ nano” has now been applied by policy enthusiasts to the pulsating mass of informal firms, even if it draws a blank from research into enterprise policy. 

India is developing as an economy of capitalist services in which ‘services’ is a resting-place for a varied set of activities.

Second, informal wages in the minority of these firms averaged Rs. 1.1 lakh per year in 2023, varying hardly at all between the three sectors but by 16 per cent (for trade) to 25-28 per cent (for manufacturing and services) between lower-paid rural and higher-paid urban sites. ³⁷ When average casual labour earnings were estimated at Rs. 70,000 per year for 2023 ³⁸ and when official minimum wages vary in absolute levels by a factor of 3.6 throughout India’s constituent States (whose enforcement capacities in any case are highly selective), all that one can conclude is that wages for informal labour range strikingly in their official adequacy by sector and site. Indeed, trawling through the detail and taking those States with officially highest and lowest absolute minimum wages in 2023, the relation between this volatile standard of minimal adequacy for unskilled work and the State-wise levels of pay recorded in ASUSE-2022-23 vary from around a third below the local minima in Chhattisgarh, Odisha, and even Delhi, to a third above them in West Bengal and Bihar. ³⁹ And the ASUSE average for informal workers in 2022-23 must be being boosted by skilled workers on informal, casual contracts. A few will even be computer-literate and financially savvy. Suggestive data from ASUSE-2022-23 show that while about 70 per cent of the firms have bank accounts or savings accounts, a far smaller proportion, 21 per cent, are using the internet for commercial purposes and a scant 6 per cent use computers while the same proportion, overwhelmingly urban in location, maintains audited accounts. ⁴⁰

Since the summary report does not discuss net value added, one might risk a further inference from gross value added that the distributive share (the relation between total profit and total wage costs) appears biased towards profit and against wages. This needs more work but would be consistent with anti-labour trends over the last few decades throughout the Indian economy and regardless of the level of skill. ⁴¹ 

A feeder economy within

How is this unincorporated economy changing? The official interpretation of the ASUSE-24 results for 2022-23 is at pains to demonstrate how the short-term effects of the COVID-19 pandemic (so evident in results for 2021-22) can be disentangled from longer term trends. The year between 2021-22 and 2022-23 saw a bounce back towards trend in the numbers of unincorporated firms and their employees - as well as a positive tremor in productivity. ⁴² But these attempts at course correction have not countered a longer-term stagnation evident between 2015 and 2023. 

While the Economic Census’ Sixth Round for 2013-14 reckoned there to have been a total of 45 million firms outside agriculture, ⁴³ even with other exempted sectors the NSSO computes half as many again. These data, therefore, need reading with caution. Between the bookends of eight years of BJP government and disregarding the COVID-19 period, the ASUSE-24 and NSSO reports reveal that their unincorporated firms expanded in number from 63.5 million to 65 million – i.e. by 2 per cent, very little. Of these firms, 24 per cent were operated by female proprietors, an average concealing a range from 4 per cent for services in Bihar to 78 per cent for manufacturing in Telengana. ⁴⁴ 

The wage work-force even appears to have declined from 113 million in 2015-16 to 110 million in 2022-23 i.e. by just over 2 per cent. ⁴⁵ The 2015-16 NSSO report showed women workers as contributing about a quarter of the unincorporated labour force, highest in manufacturing (which may be done at home) and lowest in trade (which exposes women to public space). Their proportion remained unchanged in ASUSE 2022-23, though, of the 7 per cent of the workforce with part time work arrangements, a much higher proportion (41 per cent) are women. ⁴⁶ Elsewhere, the Indian Council for Research on International Economic Relations (ICRIER) for the Asian Development Bank uses the Periodic Labour Force Survey to find women workers relatively concentrated in urban services but notes a long-term decline in female labour force participation, especially in sectors such as textiles, food and tobacco outside the labour sponge of agriculture. ⁴⁷ 

Given the constant addition every year of at least 12 million young workers to the economically active workforce, and if uncompensated by alternative livelihoods in sectors outside the reach of these surveys, these trends to stagnation will, in theory, have triggered deflating impacts on household incomes, exacerbating vulnerabilities and debt, threatening welfare, and compromising aggregate demand. To the extent that the corporate sector produces basic wage goods they will be shot in the foot. From other sources come the evidence that despite impressive aggregate growth and despite growing regional divergences, average real earnings, incomes and wages have stagnated, household debt has surged, and India’s targets for the reduction of stunting, wasting, and diet-related non-communicable disease are off-track. ⁴⁸ 

Meanwhile, over this period, disregarding the COVID-19 years, India’s GDP has grown by around 7 per cent per annum, while the growth of average income per capita is roughly a percentage point less. So, what are the conclusions that may be drawn? Either that these ASUSE-24 and NSSO data show, if only by default, the success of a raft of deliberate policies to support the development of a new scale of oligopolistic corporate economy ⁴⁹ - one said by ASUSE to be vitally (one might say ‘structurally’) dependent on the informal economy for supplies and services. And one would then note that this state-subsidised big corporate sector is far from distanced from the other expressions of informality discussed earlier and entirely missed out of ASUSE-24 and NSSO statistics. Or is the reeling of the informal economy simply due to the animal spirits of the corporate sector without needing to factor in the Indian state? Or does one decide that policies to support the unincorporated / selectively incorporated / unorganised / informal economy, to regulate the unregulatable, have largely failed? If so, what did the Union Finance Ministry reckon them to have been in 2014? How and where do those 2014-policies operate outside the reach of the state? The reports are silent: policy is outside their remit. Not quite - because it is imperative to use their data and their concepts to study policy for firms operating under the ‘micro’ policy threshold. 

Nano realities

Official reports, through which trends in the institutional tectonic plates of India’s economy can start to be glimpsed, treat informal firms and labour as binary categories, as things. Through these categories, a vast amount of data has been released to be analysed in all their sectoral and regional idiosyncrasies. However, even in this reductive form, the terms through which these are observed are subject both to paraphrasing and to fuzziness. Even in official sources, definitions and data on these categories are not stable. The nuanced behaviour, selectively compliant relations, and social processes of regulation that distinguish informal economic activity are absent from the public record - supplemented at best by ‘unofficial’ case-study research. This is also the case for the conditions of unregistered rightless labour exploited inside registered entities in the economy and the state; and so too is all the bureaucratic behaviour that avoids or flouts procedural norms. In this way, official knowledge about the informal economy is itself informalised.

Though ‘MSMEs’ officially contribute 30 per cent to India’s GDP, ⁵⁰ the answer to the question whether MSMEs plus the larger mass of unorganised / unincorporated / ‘nano’ firms now contribute a residual to its capitalist economy or still remain as its largest component is not known to this writer. But for sure, directly and indirectly they are the nutrient base for extractive corporate capital. Whether these differentiated and selectively informal firms remain the aspirational backbone of the BJP vote-bank or, for lack of support and threatened by a new vast scale of oligopolistic corporate capital, have turned towards opposition parties is also not known by other than anecdotal reports. ⁵¹ This is a question in need of research in the interest of all India’s political parties. 

The sector is the nutrient for extractive corporate capital but it is not clear if it remains the aspirational backbone of the BJP vote-bank or has turned towards opposition parties.

By contrast, the ubiquity, essential roles, relative and absolute poverty and precarity of the unorganised informal labour – including family labour – are incontrovertible. As the sinews of India’s backbone, informal labour is not just exploited by many informal firms; but directly and indirectly it also drives India’s corporate advance and much activity inside the state that residualises its own responsibility for its wellbeing. 

[ Barbara Harriss-White is Emeritus Professor and Fellow, Oxford University. For four decades prior to her retirement in 2011, her academic focus was on development economics and agrarian political economy, mostly through fieldwork in and around India. She was instrumental in co-founding the Oxford Department of International Development and the University’s Contemporary South Asia Programme in Area Studies. She has served on research advisory committees for the British and the French governments and advised 7 UN agencies. 

Since 2011, Dr. Harriss-White remains busy, mainly working on the economy as a waste-producing system. Her interests involve rural markets and commercial capital, deprivation and markets, and the ground realities of public policies in these areas. Her decades-long scholarly focus on India and South Asia started with her fieldwork during the Green Revolution. Her publications include A Political Economy of Agricultural Markets in South India (1996), India Working – Essays on Society and Economy (2004), and Dalits and Adivasis in India’s Business Economy: Three Essays and an Atlas (2014). In 2013, she was elected Fellow of the Academy of Social Sciences. Highlights of her career and publications can be accessed at https://www.barbarahw.in She can be contacted at: [email protected]].

References:

[All URLs were last accessed on October 23, 2024]

Author’s Note: I am grateful to The Hindu Centre for Politics and Public Policy for access to the reports discussed. 

1. The Seventh Economic Census initiated in 2019 has been completed but its results have not been released. See: Central Statistics Office. n.d. Vision Document for conduct of the7th Economic Census, 2019, Ministry of Statistics and Programme Implementation, Government of India [https://www.mospi.gov.in/sites/default/files/economic-census/seventh_economic_census/1Introduction_to_7th_EC.pdf] and Press Information Bureau. 2023. 7th Economic Census. [https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1988639]. 

2. Ministry of Statistics and Programme Implementation. n.d. Highlights of the Sixth Economic Census (EC),Government of India. [https://www.mospi.gov.in/sites/default/files/economic-census/sixth_economic_census/all_india/5_Highlights_6ecRep.pdf].

3. Sinha, A. 2007. Chapters 1, 5, and 6, in B. Harriss-White and A. Sinha, (Eds)Trade Liberalization and India’s Informal Economy,. New Delhi, Oxford University Press.

4. In Sengupta, A. 2009. The Challenge of Employment in India: An Informal Economy Perspective, Report of the National Commission for Enterprises in the Unorganised Sector, Government of India, Volumes 1 and 2, Academic Foundation, New Delhi.

5. Wielenga, K. D. 2020. The emergence of the informal sector: Labour legislation and politics in South India, 1940–60, Modern Asian Studies, Volume 54, Issue 4, July. pp. 1113-1148. 

6. Harriss-White, B. 2012. Capitalism and the common man: peasants and petty production in Africa and South Asia, Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, Vol. 1 (2). August. pp. 109-160. 

7. See Harriss-White B. 2003. India Working: Essays on Society and Economy, (Contemporary South Asia, Series Number 8), Cambridge University Press, for a development of these themes.

8. See references in the review of dualist, legalist, and structuralist theories of informality in Harriss-White, B. 2020. Waste, social order, and physical disorder in small-town India,The Journal of Development Studies, Volume 56, Issue 2. pp. 239-258. [https://www.tandfonline.com/doi/full/10.1080/00220388.2019.1577386#]For the complexities of the gig economy see Unni, J. 2023. Platforms and Shared Economy: Precarity of Work or Building Agency? The Indian Journal of Labour Economics, Volume 66, pp. 355-370.

9. 2018 lecture St Anthony’s College, Oxford about their book Comaroff, J., and Comaroff, J.L. 2016. The Truth about Crime: Sovereignty, Knowledge and Social Order, Chicago, IL: University of Chicago Press. 

10. National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2022-2023. Ministry of Statistics and Programme Implementation, Government of India. [https://www.mospi.gov.in/sites/default/files/publication_reports/ASUSE_2022_23_Report_FinalN.pdf]. In the ASUSE report for 2022-23, only 1 per cent are said to have ‘audited account books’. 

11. Prakash, A. 2017. The hybrid state and regulation of land and real estate: A case study of Gurugram, Haryana. Review of Development and Change. Volume 22. Issue 1 . pp 173-197; Aga, A. 2019. The marketing of corporate agrichemicals in Western India: Theorizing graded informality. The Journal of Peasant Studies. Volume 47. Issue 7. pp 1458-1476. 

12. Harriss-White, B. 2003. op. cit. 

13. Michelutti, L. et al. Mafia Raj: The Rule of Bosses in South Asia, Stanford University Press.

14. Ministry of Micro, Small, Medium Enterprises. n.d. Untitled page. Development Commissioner, Government of India. [https://dcmsme.gov.in/NCEUS.html]. 

15. See Harriss‐White, B. 2014. Labour and Petty Production. Development and Change, Volume 45, Issue 5; pp. 981-1000, especially pp. 985-9 for a discussion of these debates by NCEUS, and detailed references. [https://onlinelibrary.wiley.com/doi/epdf/10.1111/dech.12124]. 

16. Ministry of Finance. 2014. Budget 2014-2015: Speech of Arun Jaitley, Minister of Finance,Government of India. July 10. [https://www.indiabudget.gov.in/budget2014-2015/ub2014-15/bs/bs.pdf]. 

17. Which could have combined to half India’s growth rates – see World Bank Group. n.d. Data: GDP growth (annual %) – India. [https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=IN]. 

18. See for demonetisation Nataraj, G. 2017. Demonetisation and its Impact, Indian Institute of Public Administration, New Delhi, which concedes its shock to the informal economy. [https://www.iipa.org.in/new/upload/theme2017.pdf] See Ghosh, J. et al. (2017). Demonetisation Decoded: A Critique of India’s Currency Experiment. Routledge India, for a critique. For the GST, even an optimistic CGE model not distinguishing the informal economy show capital substituting for livelihoods as a result of the reforms; Bhattarai, K. 2020. Impacts of GST reforms on efficiency, growth and redistribution of income in India: A Dynamic CGE Analysis.Journal of Development Economics and Finance. [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3782402]. For one of several less positive analyses, see Ghosh, S. 2022.Formalising the Informal through GST: Evidence from a Survey of MSMEs. Review of Development and Change, Volume 27, Issue 2; pp. 150-169. [https://tinyurl.com/yja5esvp]

19. See, for one example, this appeal made in Coimbatore 2021, from a representative of over 3,50,000 (larger, small) industries, later identified as solar energy entrepreneur K.E. Raghunathan. [https://www.youtube.com/watch?v=x7gWAf7Z3A0&t=3s]. 

20. New Trade Union Initiative. 2024.Budget Statement 2024-25: We The People Deserve A Better Government, July 23. [https://ntui.org.in/?p=2256]. 

21. In the face of over a century of political demands by India’s pauperised labour force. Gooptu, N. 2001. The Politics of the Urban Poor in early Twentieth-Century India, Cambridge Studies in Indian History and Society, Cambridge University Press. 

22. For three of them, see National Sample Survey Office. 2024. Fact Sheet: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2021-2022 & 2022-2023. Ministry of Statistics and Programme Implementation, Government of India. Data: Reports of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2021-22 and 2022-23 [PDFs] [https://www.thehinducentre.com/resources/68572037-Factsheet_with_infograph_A4.pdf].

23. The set is also available through the Hindu Centre for Politics and Public Policy at https://www.thehinducentre.com/resources/data-reports-of-the-annual-survey-of-unincorporated-sector-enterprises-asuse-2021-22-and-2022-23-pdfs/article68572012.ece 

24. See for one example Sinha, G., & Nayak, B. S. 2021.Rise of Hindutva Politics, Demonetisation, and its Impact on Micro, Small and Medium Enterprises in India.In Emerging Markets. IntechOpen. [https://tinyurl.com/yu5295dk].

25. National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2022-2023,Volume II: Survey. Ministry of Statistics and Programme Implementation, Government of India. [https://microdata.gov.in/nada43/index.php/catalog/197].

26. The Annual Survey of Unincorporated Sector Enterprises (ASUSE) reports for 2022-23 a vast amount of information on types of ownership and size measured by gross value added classified by sector, State, rural-urban site, seasonality, length of working day (long!), and workforce characteristics - all of which cries out for analytical digestion. 

27. National Sample Survey Office. 2024.Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2022-2023, Ministry of Statistics and Programme Implementation, Government of India. p 31. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf]. p A729.

28. Borooah, V. K., et al. 2007. The Effectiveness of Jobs Reservation: Caste, Religion and Economic Status in India, Development and Change, Volume 38, Issue 3; pp. 423-445 [https://www.econ.cam.ac.uk/people-files/faculty/si105/Jobs%20ReservationDAC.pdf]; For 2019, see Press Information Bureau. 2019. Representation of Reserved Categories. Ministry of Personnel, Public Grievances & Pensions. Government of India. [https://pib.gov.in/Pressreleaseshare.aspx?PRID=1579065]. 

29. This is the Mandal Commissions estimate but it is disputed. 

30. For the atlas mapping such trends see Harriss-White, B., et al. 2014. Dalits and Adivasis in India’s Business Economy: Three Essays and an Atlas. Three Essays Collective. Haryana. 

31. Calculated from evidence summarised in National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Enterprises (ASUSE). 2022-23.Ministry of Statistics and Programme Implementation, Government of India. p 18. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf].

32. Cyrill, M. 2023. Micro, Small, and Medium Enterprises in India: An Explainer, India Briefing, November 1. [https://tinyurl.com/mscpcc2x]. See also Labour Bureau. n.d. Report on the Sixth Round of Quarterly Employment Survey, Ministry of Labour & Employment, Government of India, for broadly corroborative labour force data from a different sampling method for a range of registered establishments including public sector units and private limited companies. [https://labourbureau.gov.in/uploads/pdf/Final_6th_Round_Updated-7-2.pdf]

33. One lakh is 100,000. One crore is 10 million. 

34. Ref. Tables 8 to 12 in National Sample Survey Office. 2024. Fact Sheet: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2021-22 & 2022-23. pp. 7-8. Ministry of Statistics and Programme Implementation, Government of India. [https://www.thehinducentre.com/resources/68572037-Factsheet_with_infograph_A4.pdf]. 

35. Since 2020, micro-enterprises are officially defined as those with investment in plant and machinery or equipment not more than Rs. 10 million and annual turnover not more than Rs. 50 million. According to Forbes, 99 per cent of Indian enterprises are micro. ‘Small’ have investments between Rs. 50 and Rs. 100 million and annual turnover up to Rs. 500 million, while ‘Medium’ have investments between Rs. 100 and Rs. 500 million and annual turnover up to Rs. 2.5 billion. See Forbes Advisor 2024. MSME Statistics and Trends, February 6. [https://www.forbes.com/advisor/in/business/msme-statistics/].

36. For output, the upper size threshold in micro industry is Rs. 5 crore. In the ASUSE 2022-23 survey, gross output is estimated at Rs. 4.0 lakhs. For assets, see NSSO 2015-16 for an estimated assets / fixed investments of a cross-section of firms at Rs. 2.3 lakhs. If the NSSO’s estimated assets values rose in line with nominal price rises, they might be Rs. 4 lakhs in 2023 contrasting with Rs. 1 crore for micro-enterprises.” National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Enterprises (ASUSE). 2022-23. Ministry of Statistics and Programme Implementation, Government of India, and National Sample Survey Office, 2018. Economic Characteristics of Unincorporated Non-Agricultural Enterprises (excluding Construction) in India of 2015-16, Ministry of Statistics and Programme Implementation, Government of India.[https://www.mofpi.gov.in/sites/default/files/2015_16_nsso_73rd_round.pdf]

37. The average which includes not just ‘regular’, ‘formal’ workers entitled to work rights and social security benefits but also paid family labour and other residential workers, is hoisted by 15 per cent above the average for informal workers suggesting pay appropriate to skills, loyalty, and years served. Formal workers’ pay averages twice as much as that of informal workers. See National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE): 2022-23.Ministry of Statistics and Programme Implementation, Government of India. p 61 and p A992. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf]

38. Dezan Shira & Associates. 2024. A Guide to Minimum Wage in India in 2024, India Briefing, September 27. [https://www.india-briefing.com/news/guide-minimum-wage-india-19406.html/]. From their data for 2022-23, the annual average minimum wage worked out at roughly Rs. 63,600, that for Delhi was Rs. 2,10,000 while that for Bihar was Rs. 65,000, though it was raised during the year in question.

39. National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2022-2023, Ministry of Statistics and Programme Implementation, Government of India. p A993 and Endnote supra 37. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf].

40. op.cit . p A287; p A620 ; p A645.

41. Maiti, D. 2019. Trade, Labor Share, and Productivity in India’s Industries. In: Fields, G., Paul, S. (eds) Labor Income Share in Asia, ADB Institute Series on Development Economics, Springer, Singapore. 

42. National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2022-2023, Ministry of Statistics and Programme Implementation, Government of India. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf]. 

43. Ministry of Statistics and Programme Implementation. n.d.Highlights of the Sixth Economic Census. [https://www.mospi.gov.in/sites/default/files/economic-census/sixth_economic_census/all_india/5_Highlights_6ecRep.pdf].

44. National Sample Survey Office. 2024. Annual Survey of Unincorporated Sector Enterprises (ASUSE) of 2022-2023, Ministry of Statistics and Programme Implementation. Government of India. p 26. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf].

45. National Sample Survey Office, 2018. Economic Characteristics of Unincorporated Non-Agricultural Enterprises (excluding Construction) in India of 2015-16, New Delhi, Government of India, Ministry of Statistics [https://www.mofpi.gov.in/sites/default/files/2015_16_nsso_73rd_round.pdf] and Plan Implementation Report No.582 (73/2.34/2). But the Highlights of the Sixth Economic Censusestimates this labour force as some 130 million in 2013-14, in which case the decline would be 16 per cent so caution is advised. [https://www.mospi.gov.in/sites/default/files/economic-census/sixth_economic_census/all_india/5_Highlights_6ecRep.pdf]. 

46. National Sample Survey Office. 2024. Operational and Economic Characteristics: Annual Survey of Unincorporated Sector Enterprises (ASUSE) of 2022-2023, Ministry of Statistics and Programme Implementation, Government of India. p A835. [https://www.thehinducentre.com/resources/68572070-ASUSE_2022_23_Report_Final_compressed.pdf].

47. Fernandez, C., and Puri, H. 2023. A Statistical Portrait of the Indian Female Labor Force, ADBI Institute, December. [https://www.adb.org/publications/a-statistical-portrait-of-the-indian-female-labor-force]. 

48. Das, A., and Drèze, J. 2024. The problem of India’s stagnant real wages, Ideas for India, July 26. [https://www.ideasforindia.in/topics/miscellany/the-problem-of-india-s-stagnant-real-wages.html]; Keelery, S. 2024. Household debt value across India 2010-2024, Statista, August 30. [https://www.statista.com/statistics/739137/india-household-debt-value/]; Global Nutrition Report. 2022.India: The burden of malnutrition at a glance. [https://globalnutritionreport.org/resources/nutrition-profiles/asia/southern-asia/india/]

49. Dasgupta, C. 2016. State and Capital in Independent India: Institutions and Accumulations, Cambridge University Press; Bhatia, J. 2022. The Indian road to financialisation: a case study of the Indian telecommunication sector, Cambridge Journal of Economics, September, Volume 46, Issue 5; 1025-1044. 

50. Press Information Bureau. 2024.Contribution of MSMEs to the GDP, Ministry of Micro,Small & Medium Enterprises. Government of India. July 22, Delhi. [https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2035073]. 

51. The Consortium of Indian Associations (CIA) federating 70 trade associations and covering one lakh of the larger MSME businesses is one exception. Their survey in 2022-23 is widely reported to have found that ‘three-fourth of the micro, small and medium enterprises (MSMEs) are of the view that their business remained either stagnant or decreased or wound up during the last five years’. In this survey, a similar proportion is critical of the government. See ENS Economic Bureau. 2023. 72% of MSMEs stagnant since past 5 years: Survey, The Indian Express [online]. February 16. [https://indianexpress.com/article/business/72-percent-of-msmes-stagnant-since-past-5-years-survey-8447589/]. See also Sinha, G., and Nayak, B.S. 2021. op. cit.