Signalling a greater shift towards formalisation of the economy, the share of the large informal sector in overall economic activity dipped sharply in 2020-21 even as informal workers continue to bear the brunt of the pandemic’s adverse effects, the SBI said in a research report.
About:
The share of the informal economy may have shrunk to no more than 20% of the economic output from about 52% in 2017-18.
There are wide variations in the formalisation levels in different sectors but the SBI estimated that the informal economy is possibly at a maximum of 15% to 20% of formal GDP in 2020-21.
The SBI projections suggest that the informal agriculture sector has shrunk from 97.1% of the sector’s GVA in 2017-18 to just 70%-75% in 2020-21, driven by the increased penetration of credit through Kisan credit cards. Real estate has also seen a significant dip in informal activity from 52.8% in 2017-18 to 20%-25% last year.
The report estimated that about ₹1.2 lakh crore of cash usage has been formalised since the COVID-19 pandemic.
Formal agriculture credit flows have grown ₹4.6 lakh crore between 2017-18 and 2020-21, with digital payments for petrol and diesel rising around ₹1 lakh crore in the same period.
Dear Student,
You have still not entered your mailing address. Please enter the address where all the study materials will be sent to you. (If applicable).
