Demonetization, GST, and COVID-19: A Trifecta of Shocks that Cost India Dearly
India's informal sector, the backbone of its economy, has been dealt a series of devastating blows in recent years. The shockwaves of demonetization, the introduction of the Goods and Services Tax (GST), and the COVID-19 pandemic have left a trail of economic destruction, wiping out an estimated ₹11.3 lakh crore in Gross Value Added (GVA) and costing the sector 1.6 crore jobs. This comprehensive analysis, based on a report by India Ratings, delves into the profound impact of these events on India's informal economy, exploring their causes, consequences, and potential long-term implications. Understanding the Informal Sector The informal sector, often referred to as the unorganized sector, is a vast and diverse segment of the Indian economy. It encompasses a wide range of activities, from small-scale manufacturing and retail trade to agriculture and construction. Characterized by low productivity, limited access to formal credit, and a lack of social security benefits, the infor...