SBI report on Informal Sector in 2020-21

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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