The often overlooked informal or the unorganised sector of the Indian economy accounts for the largest share in employment generation.
Though there may be varying reports on this, most agree that at least 90% of India’s workforce is employed in the unorganised sector.
The Indian Government imposed a nation-wide lockdown to shield its massive population from the Covid-19 scare.
While the lockdown is inevitable, the same will have a significant impact on the livelihood and savings of the people, including our farmers, employed in the unorganised sector.
Who are part of India’s massive informal ecomony?
To give an indication of the scale of India’s informal economy and the massive number of people it sustains, I will try to put forward an indicative list of the groups of individuals who form part of this economy.
The India’s informal economy comprises, among others, of:
— Daily wage labourers including farm and construction workers and those employed in the unorganised ancillaries to the organised sector.
— Our Farmers.
— Rural artisans
— Shopkeepers and Kirana shop owners including the staff employed therein.
— Livestock and dairy farmers.
— People employed in small restaurants, roadside eateries and dhabas.
— Newspaper vendors.
— Household maids, cooks and caregivers.
— Auto and taxi cab drivers.
— Vegetable and fruit vendors.
— Hawkers and street vendors.
— Skilled workers like carpenters or self employed professionals like plumbers or electricians serving our households.
This list could go on and on.
What one must notice, however, is the fact that a signification number of the people associated with the informal sector are self employed – entrepreneurs in their own rights – who have been driving our economy forward through skill, innovation and hard-work – with little or no help from the Government.
The Virus puts their livelihood at stake.
The Covid-19 virus and the ensuing lock-down, now puts the livelihood of crores of Individuals at stake.
With businesses closed, movement and transport restrictions in place and the entire country confined to their homes, most working in the informal sector are left without a source of Income.
The story is no different for our farmers who are struggling to find buyers (and the right price) for their produce due to stalled exports and supply chain issues.
Certain industries like the leather industry is mostly informal in nature and reduced demand (including from the importing countries) is hitting such industries and the people employed therein – hard.
Left without a source of Income, many are now forced to tap into whatever little savings they have accumulated over the years, just to make their ends meet (something that will impact capital formation in the entire economy).
Even in the most hopeful of situation with the lockdown lifting, things will take a lot of time to return back to normalcy.
The world economy has been hit hard, people in general would be left with less cash and demand will take time to pick up.
In this scenario, it will take some time before India’s informal economy is able to stand up on its feet again.
With their livelihoods deeply impacted and the future grim, it is up to the Government to frame the right policies (including targeted credit delivery), that will help the individuals associated with our so-called informal economy – who have for decades been in the forefront of India’s growth story, rise again.
Let us all hope for sunny days ahead!
Image source: Debmalya Mazumdar
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