{"title":"Enterprise Informality in India: The Blind Spots in Public Policy","authors":"Santosh Mehrotra, Tuhinsubhra Giri","doi":"10.1007/s41027-023-00450-9","DOIUrl":null,"url":null,"abstract":"Abstract An essential characteristic of firm size distribution patterns in developing countries including India, is a bimodal distribution with a “missing middle”, which is widely accepted in development economics. We analyse data from the Annual Survey of Industries (ASI), National Sample Survey (NSS) and Economic Census to assess the firm size structure of the whole non-farm sector. The contribution of the paper is that for the first time a comprehensive database is constructed to enable analysis of the size structure of India’s non-farm enterprises. The second contribution is that we find a deep distortion in India, with even a “small”-scale sector being very small, relatively. We examine briefly the policy-related causes that make India an outlier even among Asian economies in respect of size structure of enterprises. Finally, we argue that the historically policy-induced informality of enterprises is being entrenched by the current hiatus in state policy in even recognising the true nature of the problem of micro, small & medium enterprises (MSMEs), which holds back both their growth and employment.","PeriodicalId":34915,"journal":{"name":"Indian Journal of Labour Economics","volume":null,"pages":null},"PeriodicalIF":1.0000,"publicationDate":"2023-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Indian Journal of Labour Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1007/s41027-023-00450-9","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
Abstract An essential characteristic of firm size distribution patterns in developing countries including India, is a bimodal distribution with a “missing middle”, which is widely accepted in development economics. We analyse data from the Annual Survey of Industries (ASI), National Sample Survey (NSS) and Economic Census to assess the firm size structure of the whole non-farm sector. The contribution of the paper is that for the first time a comprehensive database is constructed to enable analysis of the size structure of India’s non-farm enterprises. The second contribution is that we find a deep distortion in India, with even a “small”-scale sector being very small, relatively. We examine briefly the policy-related causes that make India an outlier even among Asian economies in respect of size structure of enterprises. Finally, we argue that the historically policy-induced informality of enterprises is being entrenched by the current hiatus in state policy in even recognising the true nature of the problem of micro, small & medium enterprises (MSMEs), which holds back both their growth and employment.
期刊介绍:
Indian Journal of Labour Economics (IJLE) is one of the few prominent Journals of its kind from South Asia. It provides eminent economists and academicians an exclusive forum for an analysis and understanding of issues pertaining to labour economics, industrial relations including supply and demand of labour services, personnel economics, distribution of income, unions and collective bargaining, applied and policy issues in labour economics, and labour markets and demographics. The journal includes peer reviewed articles, research notes, sections on promising new theoretical developments, comparative labour market policies or subjects that have the attention of labour economists and labour market students in general, particularly in the context of India and other developing countries.