Here's why India's war on informal labour is bad for its workers

Where the survey shows some progress is that, among regular wage earners, more people now have work contracts than two years ago

By Andy Mukherjee

India’s mission to bring its vast workforce into formal jobs is faltering, leaving a majority of nonfarm labour in unincorporated businesses. It isn’t just tax evasion that’s prompting employers to keep workers under the radar. Therefore, putting more transactions under the government’s scanner — via the digital trail of a goods and services levy — may not be the solution it’s cracked up to be.  

The most recent Periodic labour Force Survey shows that 74 per cent of nonfarm workers are in proprietorships and partnerships, officially classified as informal-sector enterprises. Between July 2020 and June 2021, when India battled multiple waves of Covid-19, the number was three percentage points lower. A reopened economy may have brought back livelihoods; it doesn’t appear to have made a dent into precarity.