SBI report on Informal Sector in 2020-21
Introduction: India’s largest public sector bank State Bank of India has released a research report on the informal sector of India during the period of 2020-21. It showed the situation of the informal sector and labourers who are dependent on it.
Research Report:
In SBI’s research report it has been seen that the share of the large informal sector in overall economic activity sank sharply in 2020-21 even as informal workers continue to hit hard by the pandemic’s adverse effects when it was a greater shift towards formalization of the economy. While a report is concluding that the share of the informal economy may have shrunk to less than 20% of the economic output from about 52% in 2017-18 which would be termed this scenario as ‘positive development’. The table below shows this easily.
Sector | 2017-18 | 2020-21 |
Agriculture | 97.1 | – |
Construction | 74.5 | 35-40 |
Mining | 22.5 | 15-17 |
Services | 86.6 | – |
Transport | 47.7 | – |
Manufacturing | 22.7 | 19-21 |
Financial services | 11.9 | – |
Utilities | 5.3 | 0 |
Real Estate | 52.8 | – |
Total | 52.4 | 15-20 |
There are many differentiations in the formalization levels in different sectors but as per the estimation of the SBI the informal sector’s economy may be at a maximum level of 15% to 20% of formal sector’s GDP in 2020-21.
An estimation of IMF (International Monetary Fund) presented in its policy paper that the share of India’s informal economy in the Gross Value Added (GVA) was at 53.9% in 2011-12 and would be improved only slightly to 52.4% in 2017-18. As per a 2014’s National Sample Survey around 93% of the workforce gained their livelihoods from the informal sector.
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