Business Standard

Why India needs a formal economy

Informal workers who migrate and send remittances allow families to eke out a living. However, forced isolation will see them struggling to survive as the economy staggers to a standstill

Economy
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The scheme could mean transferring Rs 5,000-6,000 into the bank accounts of 80-100 million poor families.

Errol D SouzaAstha Agarwalla
The Covid-19-induced lockdown has resulted in lost jobs and the closure of informal businesses everywhere. Entrepreneurs are facing cash flow issues and workers in casual and informal employment are undergoing liquidity stress, causing them to migrate back to their families. 

While small and medium enterprises that constitute a part of the informal sector are a characteristic of fast-growing economies, it is a mistake to think that they are an important engine of economic growth. Small firms do not offer stable employment and non-wage benefits. Nor do they offer a greater quantity of employment.

Much of the focus in policy circles has been
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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