Making Punjab’s Urban Informal Sector More Resilient While Securing Livelihoods During Post-COVID-19 Times

Urban informal sector occupies a place of significance in Punjab’s economy due to its contribution to output and employment. It encompasses mainly the segments of manufacturing, trading and other services—out of which, the manufacturing segment remains an important constituent. Informal enterprises in urban Punjab operate either as Own Account Enterprises (OAEs) or the Establishments—the former operate with relatively limited scale of operation and suffer from low worker productivity but the latter despite having relatively better scale of operation remain exposed to competition besides suffering from low productivity of labour and capital. A variety of growth constraints continue to retard the operational performance of these firms. Similarly, the informal firms in urban Punjab are found to be having relatively limited access to formal credit when compared with their counterparts in other major Indian states. All this indicates nothing but the fragile state of informal enterprises in urban Punjab which got worsened further due to onslaught of COVID-19 pandemic. In such situation, this article urges for stepping-up business resilience of informal enterprises. In fact, the state should not merely be the tax collecting agency; rather it should act as a facilitator to promote these firms who are striving in an era of competition. Besides firms, the informal workers too suffer from prevailing conditions of livelihood insecurity which need to be contained. Provisions should be made for workers’ capability building and sector-specific skill training. Above all, a contributory social security system with state, employers and workers as contributors, should be instituted to safeguard informal workers against contingent insecurity.