The post-independence development trajectory of India has been based on a number of growth models from time to time. The outcomes however have been mixed. While it was expected of the Indian economy to steadily transition from the primary to the secondary sector, the latter failed to absorb the surplus labour from agriculture. In an attempt to find subsistence, the out-marching agricultural labour derived subsistence from the informal sector. Over the course of time eventually, the informal sector in India has grown considerably. Lately, the policy prescription has been trying to limit the informal sector in India. The present note is a brief elucidation on the viability and importance of the informal sector for the Indian economy. The note draws on the common observations and contemporary factual outcomes and tries to validate the case for the prevalence of the informal sector in the Indian economy.
