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Linking the Formal and Informal EconomyConcepts and Policies$
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Basudeb Guha-Khasnobis, Ravi Kanbur, and Elinor Ostrom

Print publication date: 2006

Print ISBN-13: 9780199204762

Published to Oxford Scholarship Online: September 2006

DOI: 10.1093/0199204764.001.0001

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Formal and informal enterprises: concept, definition, and measurement issues in India

Formal and informal enterprises: concept, definition, and measurement issues in India

Chapter:
(p.93) 6 Formal and informal enterprises: concept, definition, and measurement issues in India
Source:
Linking the Formal and Informal Economy
Author(s):

M. R. Narayana

Publisher:
Oxford University Press
DOI:10.1093/0199204764.003.0006

This paper introduces the multiplicity of official concepts, definitions, and measurements of economic contributions and performance of formal and informal enterprises in India’s manufacturing and services sectors. Conceptually, formal (or informal) enterprises are distinguished by registered (or unregistered), organized (or unorganized), and regulated (or unregulated) enterprises. Employment size is a major criterion to define these enterprises. In contrast, registered and unregistered small scale enterprises are uniquely defined by size of capital investments. Using the national level databases, the economic performance of formal, informal, and small scale enterprises is separately measured by their contributions to production, employment generation, and use of assets in rural and urban areas. This implies that the standardization of concepts and definitions are a precondition for establishing comparability between the databases, or for the measurement of economic contributions and performance of India’s formal and informal enterprises.

Keywords:   enterprises, organized, unorganized, informal, registered, unregistered, small scale, own account, directory establishments, non-directory establishments

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