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Post-Covid, India's Weakest Link May Be Its Informal Sector

The 40% of worker in the informal non-agricultural sector may be worst hit, says HSBC India's Pranjul Bhandari.

A worker wearing a protective mask operates a machine while producing adhesive sealing tapes at the Ajit Industries Pvt. factory in Sonipat district, Haryana, India. (Photographer: Prashanth Vishwanathan/Bloomberg)
A worker wearing a protective mask operates a machine while producing adhesive sealing tapes at the Ajit Industries Pvt. factory in Sonipat district, Haryana, India. (Photographer: Prashanth Vishwanathan/Bloomberg)
Close to 80% of India's workers are employed in the informal sector, which accounts for nearly 50% of the India's GDP. Few high frequency economic indicators capture the health of this segment of the economy."But a lot is at stake. Ignoring the informal sector can hurt jobs, wages, and even macro stability," wrote Pranjul Bhandari, chief India economist at HSBC, in a note dated July 15.The 20% of workers in India's formal sector doin...
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