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What constrains the performance of enterprises in India's informal sector?

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  • Rajesh Raj Natarajan
  • Kunal Sen

Abstract

This paper examines the informal sector in India from a production perspective and focuses on the constraints that affect the growth and sustainability of informal enterprises. It relies on nationally representative enterprise-level data from 2010/11 to 2023/24, complemented by findings from qualitative surveys. The results show that the sector has expanded but that this expansion is largely driven by a rise in the number of enterprises, while the growth in employment and value addition remains limited.

Suggested Citation

  • Rajesh Raj Natarajan & Kunal Sen, 2026. "What constrains the performance of enterprises in India's informal sector?," WIDER Working Paper Series wp-2026-60, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2026-60
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