Leveraging Real-Time Payments Data for Informal Economy Estimation

Ravi Kant Gupta, Karanjeet Singh Uppal and Prateek Jain

World Economics, 2026, vol. 27, issue 3, 39-72

Abstract: India's informal economy - estimated at 22-52% of GDP and employing 85% of the workforce, remains systematically undercounted by survey methods designed for a pre-digital, cash-only era. UPI processed 241.62 billion transactions worth ?314 lakh crore in FY 2025-26, generating, for the first time, a near-real-time digital data trail that directly intersects with informal sector economic activity, particularly through its person-to-merchant (P2M) segment. Four analytical signals in UPI data, sustained decline in average transaction value from ?4,867 to ?1,300 over nine years; a 99% five-year CAGR in sub-?500 P2M transactions; widening geographic merchant spread; and 85% of all P2M payments valued at ?500 or below, constitute a multi-dimensional, descriptively grounded case for UPI as an informal economy indicator. Four operationally implementable methodological pathways are identified: monthly UPI P2M data as a high-frequency informal sector indicator; the NPCI merchant registry as a supplementary ASUSE sampling frame; triangulation with HCES 2022-23; and two immediately constructable indicators - the UIMR and the UISI. Six institutional recommendations are directed at MOSPI, NPCI, and RBI to implement this framework now; India's experience as the world's largest real-time payments market offers a replicable model for Brazil, Nigeria, Thailand, Indonesia, and other real-time payment economies.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.world-economics-journal.com/Papers/Details.aspx?ID=981 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wej:wldecn:981

Access Statistics for this article

More articles in World Economics from World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE
Bibliographic data for series maintained by Ed Jones ().