Why Informal India cannot be 'Atmanirbhar' India

The romanticism around employment-generating and cost-cutting characteristics of these informal firms have made us believe that informality is forced by excessive cost of regulation

Atmanirbharta, or self-reliance, has been a holy grail for the Indian economy. In its present avatar, the idea hovers around increasing competitiveness and growth of the manufacturing sector, and rightly so. The manufacturing sector in India has been bypassed by the tentacles of economic growth over past three decades, with services sector heralded as engine of growth with a high share in output and employment.
 
This might just be the right time for India’s manufacturing sector to exhibit a coming of age, with thrust on competitiveness. Competitiveness arises from productivity differentials, which, in turn, are a function of firm