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The Growth Barriers of Informal Sector Enterprises: Evidence from India

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  • Subash Sasidharan
  • S. N. Rajesh Raj

Abstract

type="main"> The present study investigates the growth barriers of informal sector enterprises in India. The empirical analysis is based on the National Sample Survey Organization's unit-level data for three years, 2000–2001, 2005–6, and 2010–11. The results of the study reveal: proprietary and large firms survive and grow; enterprises managed by women are less likely to decline; inadequate power supply poses a severe growth obstacle to all categories of firms; and proprietary firms encounter capital shortage while large firms are constrained by the non-availability of raw materials. We do not find evidence of sub-contracting acting as an enabling factor in firm growth.

Suggested Citation

  • Subash Sasidharan & S. N. Rajesh Raj, 2014. "The Growth Barriers of Informal Sector Enterprises: Evidence from India," The Developing Economies, Institute of Developing Economies, vol. 52(4), pages 351-375, December.
  • Handle: RePEc:bla:deveco:v:52:y:2014:i:4:p:351-375
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    3. Takashi Kurosaki, 2019. "Informality, Micro and Small Enterprises, and the 2016 Demonetisation Policy in India," Asian Economic Policy Review, Japan Center for Economic Research, vol. 14(1), pages 97-118, January.

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