Theme
India's Informal Economy
India's informal economy is the roughly nine-tenths of the workforce that earns a living outside formal, regular, salaried employment: the self-employed, casual labourers, unregistered micro-enterprises and, more recently, app-based gig and platform workers. It is not a fringe but the default condition of Indian work, and the state now approaches it as a measurement problem (counting it through the Periodic Labour Force Survey), a coverage problem (extending social security to the uncovered through registries like e-Shram) and a formalisation problem (drawing informal firms and workers into the tax, credit and benefit net through portals like Udyam).
Updated
- Informal share
- unorganised sector = 43.99 crore of 53.53 crore workers in 2019-20, ~82% (Economic Survey 2021-22); informal employment estimated at ~90% of workers
- e-Shram registrations
- 31.78 crore unorganised workers as of 14 July 2026 (MoS Labour, Lok Sabha reply); 30.98 crore confirmed by PIB as of 3 Aug 2025
- Self-employment
- 56.2% of workers, the largest category (PLFS Annual Report 2025)
- Gig workforce
- 77 lakh (2020-21), projected 2.35 crore by 2029-30 (NITI Aayog)
Role
India’s informal economy is less a sector than the baseline shape of Indian work. By the Economic Survey’s own accounting, the great majority of workers earn outside formal, regular, salaried jobs — as own-account and self-employed workers, casual wage labourers, unpaid family workers, and staff of the vast population of unregistered micro-enterprises. The state engages this reality through three institutions working at cross purposes to the same end. The Ministry of Statistics and Programme Implementation measures it through the Periodic Labour Force Survey, which is why arguments about informality are really arguments about what the PLFS shows. The Ministry of Labour and Employment tries to cover it, running the e-Shram registry, the PM-SYM pension and the EPFO/ESIC systems, and now the Code on Social Security’s gig-worker provisions. And the formalisation machinery — the MSME ministry’s Udyam and Udyam Assist portals, the Labour Codes, employment-linked incentives tied to provident-fund enrolment — tries to convert informal units and workers into formal, counted, benefit-bearing ones.
The fault lines are structural and recur across the desks this theme touches. Measurement is contested because a low headline unemployment rate coexists with a workforce that is majority self-employed, so the argument turns on composition, not the top-line number. Coverage is contested because registration on a portal is not the same as a funded entitlement: tens of crores are enrolled on e-Shram, but what each enrolment actually pays remains the live question. Gig work has opened a third front, with the centre legislating through the Labour Codes while Rajasthan and Karnataka legislate through their own state welfare-board Acts. The theme therefore connects the measurement debate on the official-statistics desk, the coverage and gig-work debate on the labour desk, the rural-welfare safety net that absorbs much informal distress, and the credit-and-formalisation question that runs through the MSME and finance desks.
Desk maintained by IndiaStand editorial cycles. Officeholders are transient; this dossier tracks the institution.
Timeline since 1947
- reference
National Commission for Enterprises in the Unorganised Sector constituted
The government set up the NCEUS to study the conditions of the unorganised sector. Its reports found that roughly 93% of India's workforce was in unorganised or informal work and recommended a national social-security floor for them.
- reference
Unorganised Workers' Social Security Act enacted
Acting on the NCEUS recommendations, Parliament passed a framework law enabling the centre and states to notify welfare schemes for unorganised workers and to constitute social-security boards. Critics argued the enacted version was diluted and lacked guaranteed, funded entitlements.
- reference
Periodic Labour Force Survey replaces the quinquennial employment surveys
MoSPI's National Statistical Office launched the PLFS, moving India from once-in-five-years employment-unemployment surveys to annual (and later quarterly and monthly) estimates — the instrument through which informality, self-employment and labour-force participation are now measured.
- official
Pradhan Mantri Shram Yogi Maandhan (PM-SYM) launched
A voluntary, contributory pension scheme for unorganised workers earning up to Rs 15,000 a month, aged 18-40, promising Rs 3,000 a month after age 60 with the government matching the worker's contribution 1:1. It became the flagship contributory pension for informal workers.
- reference
Code on Social Security recognises gig and platform workers
The Code on Social Security, 2020 defined 'gig worker' and 'platform worker' as distinct categories for the first time and enabled aggregator contributions toward their welfare. In parallel, from 1 July 2020 the Udyam portal became the single route to register and classify MSMEs, replacing Udyog Aadhaar.
- official
e-Shram portal launched
The Ministry of Labour and Employment opened e-Shram, a National Database of Unorganised Workers built on self-declaration and seeded with Aadhaar, initially targeting an estimated 38 crore unorganised workers and issuing each a Universal Account Number.
- official
NITI Aayog issues the first official study of the gig and platform economy
The report 'India's Booming Gig and Platform Economy' estimated 77 lakh gig workers in 2020-21 (about 1.5% of the total workforce) and projected the number would rise to 2.35 crore by 2029-30, and set out social-security options for the sector.
- reference
Rajasthan passes the first state gig-worker welfare law
The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023 made Rajasthan the first Indian state to legislate registration, a welfare board and an aggregator-funded welfare fee for platform-based gig workers.
- reference
Four Labour Codes brought into force; Karnataka enacts its gig-worker law
The central government commenced the four Labour Codes, whose Code on Social Security extends provisions to gig and platform workers nationally; Karnataka's Platform Based Gig Workers (Social Security and Welfare) Act, 2025 added a second state welfare-board regime. Operational rules remained in draft into 2026.
Frequently asked
- What is India's Informal Economy?
- India's informal economy is the roughly nine-tenths of the workforce that earns a living outside formal, regular, salaried employment: the self-employed, casual labourers, unregistered micro-enterprises and, more recently, app-based gig and platform workers. It is not a fringe but the default condition of Indian work, and the state now approaches it as a measurement problem (counting it through the Periodic Labour Force Survey), a coverage problem (extending social security to the uncovered through registries like e-Shram) and a formalisation problem (drawing informal firms and workers into the tax, credit and benefit net through portals like Udyam).
- What does India's Informal Economy do?
- Its remit covers Measurement of informality (Periodic Labour Force Survey, informal-sector and informal-employment estimates), Social-security coverage for unorganised workers (e-Shram registry, PM-SYM pension, the Code on Social Security), Gig and platform work (recognition, welfare boards, state gig-worker laws), Formalisation drives (Udyam and Udyam Assist for micro-enterprises; EPFO/ESIC enrolment), The legal architecture (NCEUS, the Unorganised Workers' Social Security Act 2008, the four Labour Codes).
- What is the latest on India's Informal Economy?
- As of 2026-07-28: Four Labour Codes brought into force; Karnataka enacts its gig-worker law. The central government commenced the four Labour Codes, whose Code on Social Security extends provisions to gig and platform workers nationally; Karnataka's Platform Based Gig Workers (Social Security and Welfare) Act, 2025 added a second state welfare-board regime. Operational rules remained in draft into 2026.
Official sources
The government's own pages for this institution — go straight to the primary.
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Administers e-Shram, EPFO/ESIC, PM-SYM and the four Labour Codes; the ministry that owns social-security coverage for unorganised workers.
labour.gov.in/
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Self-declaration registry that issues a Universal Account Number to unorganised workers and maps them to welfare schemes.
eshram.gov.in/
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Runs the Periodic Labour Force Survey, the official measure of employment, informality and self-employment.
www.mospi.gov.in/
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Single online route to register and classify micro, small and medium enterprises; the Udyam Assist Platform onboards informal micro units.
udyamregistration.gov.in/
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First official study to size and project the gig and platform workforce.
www.pib.gov.in/PressReleasePage.aspx?PRID=1837277