Comment on the challenges for inclusive growth which include careless and useless manpower in the Indian context. Suggest measures to be taken for facing these challenges.

An informal economy is usually defined as an economic setup where the workers do not [have] social security, no fixed wage system, and for the firms are not registered.

Reducing size of informal economy is pivotal to India's inclusive growth as it will:

• reduce income inequalities due to adherence to strict wage codes.
• ensure more tax collection by the government → strengthening of welfare measures.
• weaker sections can become a partner & benefittor of the growth of the economy due to formal involvement in the economy.
• Better targetting of education &

health schemes would be possible

Provision of state services would become effective.

• Technology can play a big role in reducing the size of informal economy of India:

Technology can aid income tax collection

Identifying tax evasion and tax avoidance-

Use of technology to give firms a unique identification number for labour department ⇒ to ensure benefits of social security reach the workers.

Improved communication technologies requires formalisation of economy in many ways.

Registration of firms, licensing & monitoring becomes easier.

Thus, technology can play a big role in helping India leapfrog to inclusive growth.