The objective of this study is to examine the impact of trade reforms on India's informal sector and its workers. It defines the macro aspects of the sector and its size. To provide such a framework, in which the influence of policy changes, or any exogenous change, can be traced through different sectors and socio-economic classes, the study uses a multi-sectoral model. The model quantifies the magnitude of the impact of different policies and identifies sectors that respond more strongly through production, as compared to others. By constructing a social accounting matrix (SAM) with a formal-informal breakdown of the production sectors of the economy, we bring out the high degree of overlap that exists between informal households.
The Indian Informal Economy within a SAM Framework.