SBI: ₹26 trn of economy formalised in FY16-FY23

India has formalised 26 trillion of its economy between FY16 and FY23, as the share of the informal economy fell to 23.7 per cent from 25.9 per cent during the seven-year period, according to a report released by the State Bank of India (SBI) on Friday.

- SHIVA RAJORA

The report estimated the share of the informal economy by using the recently released Annual Survey of Sector Unincorporated Enterprises (ASUSE).

"Assuming manufacturing as a proxy for industry gross value added (GVA) and trade and other services sector for services GVA, size of the total informal economy has declined in these seven years.

This translates into ₹26 trillion formalised in seven years," the report notes.

In absolute terms, the total amount of informal GVA increased to 58.4 trillion in FY23 from 18.6 trillion in FY16.

Of this, informal agriculture contributed ₹43 trillion, followed by informal services (11.8 trillion) and informal industry (3.6 trillion) in FY23.

Meanwhile, the share of informal agriculture in total GVA rose to 95.9 per cent in FY23 from 94.8 per cent in FY11.