Breaking down the question
The verb how do you view invites an evaluative, sociological reading rather than a bare description. The examiner wants a position on what the expansion of the informal sector signifies for Indian development — whether it is a sign of exclusion and distress, a source of livelihood and resilience, or both at once.
The object of the question, the informal sector, must be defined at the outset. Coined in the study of urban economies, the term captures enterprises and workers outside the regulated, protected, taxed segment of the economy — street vendors, home-based workers, casual construction labour, small workshops. In India this segment employs the overwhelming majority of the workforce, so its growth is a fact of first importance.
The analytical task is to explain why the sector has expanded rather than contracted with development, and to judge what that expansion means for workers and for the wider society.
How to approach it
Open with a definition and the scale of the phenomenon — the informal sector as the dominant form of employment in India, and its continued growth despite decades of industrial development. State clearly that classical expectations of a shrinking informal sector have not been borne out.
Then explain the growth: the failure of the formal sector to absorb surplus labour, the informalisation of formal enterprises through outsourcing and contract labour, distress-driven migration from agriculture, and the low-productivity refuge that the sector provides. The note on the informal sector and child labour develops these links.
Conclude with a balanced verdict: the growth reflects both the dynamism of survival strategies and the structural failure to generate secure, protected employment.
Model answer
The informal sector comprises those economic activities that fall outside the ambit of state regulation, social protection, and formal contracts — petty trade, home-based production, casual and contract labour, and small unregistered enterprises. In India this sector accounts for the vast majority of the workforce, and its share has not declined but grown, making its expansion one of the defining features of the Indian economy.
Several processes explain this growth. First, the formal, organised sector has failed to generate employment on the scale needed to absorb a rising labour force, so surplus workers crowd into low-productivity informal activity as a refuge rather than a choice. Second, formal enterprises have themselves informalised — outsourcing production, hiring through contractors, and casualising their workforce to cut costs and evade labour law, so that informality now penetrates the organised economy. Jan Breman's studies of Gujarat document precisely this footloose, casualised labour. Third, agrarian distress and the mechanisation of agriculture push migrants into cities, where they enter informal work in construction, services, and street trade.
How, then, should the growth be viewed? On one reading it is a sign of resilience — the informal sector provides livelihoods, entrepreneurial energy, and low-cost goods and services that the formal economy cannot supply, cushioning the poor against unemployment. On another, more critical reading it signifies exclusion and precarity — informal workers lack security, social protection, minimum wages, and bargaining power, and their growing numbers reveal the failure of Indian development to deliver decent work. The persistence of child labour within this sector underscores its exploitative edge.
The balanced view holds both together. The growth of the informal sector reflects the survival strategies of a population the formal economy has failed to absorb; it is at once a source of livelihood and a symptom of structural exclusion. The policy challenge is not to wish the sector away but to extend social protection, skilling, and rights to those within it.
Examiner's perspective
Examiners reward a clear definition and an accurate sense of scale — candidates who convey that informality is the norm, not the margin, of Indian employment start strongly. A common weakness is to treat the sector merely as a residual problem to be eliminated, missing its livelihood function.
The strongest answers explain why the sector grows despite development — informalisation of the formal economy, jobless growth, distress migration — rather than merely describing conditions within it. Reference to Breman or Hart signals theoretical grounding. The concluding judgement should be balanced, holding resilience and precarity together rather than choosing one, and should gesture towards extending protection to informal workers.