Informality in Manufacturing Sector in India

Abstract

In many developing countries including India, a significant proportion of workers are in the informal sector which includes manufacturing, trade, construction, etc. The informal manufacturing sector has been playing an important role in employment generation despite several issues. This study aims to determine the size and sectoral (rural/urban) distribution of the informal manufacturing sector in India and the North Eastern States (NES) in recent years.  The study has used secondary data from the 67^th and 73^rd National Sample Survey Office (NSSO) rounds and descriptive statistics like percentage and average.  The percentage share of informal manufacturing enterprises has been found more in the rural than the urban areas in both rounds.  During the period of study, the percentage increase in total number of informal manufacturing enterprises lies in between 13%-17% at all India level. The size of the informal manufacturing sector in the North Eastern States is seen to have declined both in absolute as well as percentage terms. This has been due to the fall in the number of units in the rural sector even though the decline has largely been offsetted by an increase in the urban sector.