Why Is No One Talking About India's Unorganised Sector? Economist Arun Kumar Explains | Neon Show

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90% of India’s workforce is in the Unorganized Sector and they make less than ₹11,000 a month.

Latest government data shows that two-thirds of India’s workforce is stuck in low-productivity jobs within the unorganised sector— a sector which contributes about 50% to India’s GDP and employs more than 90% of the country’s workers. So, what exactly is this unorganised sector? Why is it the invisible powerhouse?

According to the National Commission for Enterprises in the Unorganised Sector (NCEUS), it refers to small, informal businesses that aren't officially registered—usually run by families or individuals, with fewer than ten people on the payroll. But here’s where things get interesting—or rather, concerning.

The unorganised sector has a massive number of establishments, but these businesses are so small that they average fewer than two workers per firm. So, even though there are tons of businesses, they’re not really creating a ton of jobs.

According to the government’s Annual Survey (ASUSE), demonetisation and GST hit informal enterprises hard, widening the gap between the formal and informal sectors.

Unfortunately, the unorganised sector hasn't bounced back as quickly as the rest of the economy, and the income these businesses generate has taken a hit too.In fact, Small businesses without any hired workers, or OAEs, report an average annual income of just ₹1,27,073 per year. That’s roughly ₹10,000 a month—barely enough to get by.

Watch our conversation w/ Prof Arun Kumar to know more!

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Time Stamps

0:00 - Introduction
0:14 - Who is Arun Kumar?
1:25 - SEA's growth from 1947 as compared to India?
3:31 - Proof of India’s failure in education system
8:48 - Does India really have “TOO MANY” billionaires & why is it a concern?
9:24 - The journey from becoming a “developing” nation to a “developed nation.”
10:51 - The “Bottom-Up Approach” - What’s that?
14:00 - Growing chasm between high-earning & low-earning category?
17:03 - What’s the unorganised sector in India?
17:47 - What are the Micro, Small & Medium Sectors in India?
18:33 - Robot uprising vs human employment!
21:03 - What are the 4 types of unemployment in India?
23:27 - 60k jobs and 47 lakhs applicants? Reality of unemployment in India
27:20 - Is GDP a proxy of the organised sector for the unorganised sector?
30:03 - Demonetisations hits the unorganised sector
30:34 - GST hits the unorganised sector
31:03 - Prestige Pressure cooker, VIP luggage, & leather goods industry confirms shift from unorganised to the organised sector
34:25 - Black economy = Digging holes & filing holes
40:40 - India should have been 8X its current economy - how & why did we fail?
49:17 - Balancing organised & unorganised sector: What would help?
51:11 - How can we help the unorganised sector generate more income?
57:45 - Is GST a misfit for India’s economy?
1:01:48 - Bottom economy = 40% of the Goverment’s vote bank
1:11:38 - How will India transform into a “developed” nation?
1:28:30 - JNU & anti-nationalism
1:31:30 - No requirement of Andh-Bhakts
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Disclaimer

This video is for informational purposes only. The views expressed are those of the individuals quoted and do not constitute professional advice.