Why Is No One Talking About India's Unorganised Sector? Economist Arun Kumar Explains | Neon Show
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90% of India’s workforce is in the Unorganized Sector and they make less than ₹11,000 a month.
Latest government data shows that two-thirds of India’s workforce is stuck in low-productivity jobs within the unorganised sector— a sector which contributes about 50% to India’s GDP and employs more than 90% of the country’s workers. So, what exactly is this unorganised sector? Why is it the invisible powerhouse?
According to the National Commission for Enterprises in the Unorganised Sector (NCEUS), it refers to small, informal businesses that aren't officially registered—usually run by families or individuals, with fewer than ten people on the payroll. But here’s where things get interesting—or rather, concerning.
The unorganised sector has a massive number of establishments, but these businesses are so small that they average fewer than two workers per firm. So, even though there are tons of businesses, they’re not really creating a ton of jobs.
According to the government’s Annual Survey (ASUSE), demonetisation and GST hit informal enterprises hard, widening the gap between the formal and informal sectors.
Unfortunately, the unorganised sector hasn't bounced back as quickly as the rest of the economy, and the income these businesses generate has taken a hit too.In fact, Small businesses without any hired workers, or OAEs, report an average annual income of just ₹1,27,073 per year. That’s roughly ₹10,000 a month—barely enough to get by.