The Growth Barriers of Informal Sector Enterprises: Evidence from India

Subash Sasidharan and Rajesh Raj

The Developing Economies, 2014, vol. 52, issue 4, 351-375

Abstract: type="main">

The present study investigates the growth barriers of informal sector enterprises in India. The empirical analysis is based on the National Sample Survey Organization's unit-level data for three years, 2000–2001, 2005–6, and 2010–11. The results of the study reveal: proprietary and large firms survive and grow; enterprises managed by women are less likely to decline; inadequate power supply poses a severe growth obstacle to all categories of firms; and proprietary firms encounter capital shortage while large firms are constrained by the non-availability of raw materials. We do not find evidence of sub-contracting acting as an enabling factor in firm growth.

Date: 2014
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