India Fact of the Day the 10 years from 1999 to 2009, India’s workforce increased by 63m. “Of these, 44 million joined the unorganized sector, 22 million became informal workers in the organized sector, and the number of formal workers in the organized sector fell by 3 million.” This is a social catastrophe. It is due not only to labour-market distortions, but to a host of constraints on the creation, operation and, not least, closure of organised and large-scale businesses.


But how many of those workers could be plausibly attritbuted to the Beatles? Prof. Cowen would likely appreciate perusing such research while listening to the radio.

Oh, and I should point out that one of those Indian workers just called me from "Microsoft Windows" sbout my computer, for the first time in a couple of weeks. Though slowly, they are learning - I just let them talk while going about my business and providing the barest responses to keep the line tied up, but it only took him about a minute to figrure it out..

American telemarketers/scammers are much more advanced when it comes to hanging up to go on to the next number, in the endless chase for the pot of gold at the end of the call center rainbow.

Would like to get more information, please.

Thank you.


(reference link seems hidden by paywall)

What "social catastrophe" is being referred to here ??

Over 90% of Indian labor force is in unorganized sector -- so what's new ?
The socialist Indian Government has always been a disaster -- so what's new ?

{organized labor sector in India refers to government-licensed organizations... those registered and who pay sales tax, income tax, etc. These include the publicly traded companies, incorporated or formally registered entities, corporations, factories, shopping malls, hotels, and large businesses. Unorganized sector (aka 'own account enterprises') refers to all unlicensed, self-employed or unregistered economic activity such as owner manned general stores, handicrafts and handloom workers, rural traders, farmers, etc}

... and millions of Microsoft employees, most of whom are named "Mike".

"The socialist Indian Government has always been a disaster — so what’s new ?"
More than it used to be the case?

How is it a "social catastrophe"? It's happening because people see more benefits in working in the informal sector, unhampered by the famous Indian bureaucracy. This too, will occur in places like the US, where only very large firms, able to pass along the costs of bureaucratic ransom and individual gray marketeers that ignore the bureaucracy will survive.

Indeed. I posit that much of the workforce reduction in the US is a reflection of this. People have to eat and live. I've seen the same thing happening in Canada.

Actually, yesterday I had a conversation with an electrician. The electrical codes have been changing recently, including some rules which simply don't work. He said the net result are electricians doing work without pulling permits. Which also likely means that they aren't paying taxes or other fees as well.

Bureaucracies in Canada look to Quebec and Ontario for their inspiration, places where 50% of the construction industry in Quebec is underground, and in greater Toronto where only 20% of the construction projects are compliant.

The Indian bureaucracy is a goal to attain. Bureaucracies everywhere are diligently working towards that goal.

In addition to the bureaucratic negativity there's also the significant influence of background checks. Individuals that fail a background check, for whatever reason, know that they'll be unlikely to ever pass one in the future. This disqualifies them for many jobs, housing, loans, etc. Yet they must still eat, wear clothing and have a place to sleep out of the rain. An underground portion of the economy will eventually be devoted to employing, feeding and housing these people, whose numbers will continue to grow since once on the unemployable list one is on it for life. A caste system is being created.

What does the tax regime in India look like? Presumably if everyone is working "informally," them by definition they're not paying income taxes. With no property records, there's no property tax being paid. I can't imagine that sales taxes are collected regularly. How do the governments of India find themselves?

..."fund" themselves.

How do the governments of India fund themselves?

If you every visit India, check out the infrastructure (or the lack of it) for yourself. And the policing (or the lack, or incompetence, of it), and the essential services (waste management being the most visible, but also electricity, water supply....)

You'll get your answer.

I'll admit to not knowing much about the Indian economic landscape, but based on the data I hypothesize that a third-world country government proposes 1st world country labor "safety" and "regulatory" standards on the organized work environments. An equivalent result could be achieved by say the Indian government mandating a nationwide USD 15.00 per hour minimum wage on the organized labor sector. What could possibly go wrong?

Speaking of third-world countries - and no the US does not qualify - how is Venezuela doing these days?

"These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger. Who's the banana republic now?"

Oh how quickly things change comrade Sanders.

one thing to note is that india has quadrupled its GDP in US dollar terms in just 13 years from 2002 to 2015 and has been growing at an average 6 percent per annum since the 1980s which is a long stretch of good growth. Now growth is at 7 percent and with population growth of just around 1 percent per annum, it means per capita income increases six percent a year. It only suffers in comparison with some of the east asian superstars but is doing better than almost every other developing nation.

Interesting to compare with Brazil. In 1990, Brazil's GDP per capita was 10 times india's and by 2015 it was less than 5X. And at the per capita income rates of growth of both, it won't be long before this converges.

and finally the tax take of the governments in india have grown enormously despite lowering rates precisely because more and more businesses and people are paying tax.

It is comparing apples and oranges.

Basically, the indian economy has posted a long track record, thirty seven years and counting, of growth of at least six percent per annum which gives a great deal of confidence that it is on the right path. The "tiger" growth of East Asia is an exception, western economies essentially became wealthy by posting decades of 3 per cent per annum growth.

Wonder what impact the currency refresh had on the informal.sector?

We got to be very wise with how we go about doing things. As a trader, I always work very carefully given I am working with OctaFX broker and under them, it’s ever easy because of the epic setting with having low spreads from 0.1 pips to high leverage up to 1.500 while there is zero balance protection, swap free account and then there is also daily market news and analysis updates too, so all this works nicely in our favor.

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