Advantages of formalization
- Increased tax revenues for the government due to better reporting under taxation laws
- Coverage of population under social protection plans, saving from financial distress during difficult times
- Increase workers’ welfare and the opportunities for decent jobs
- Reduce unfair competition between formal and informal enterprises arising from tax or regulatory arbitrage
Downsides of formalization
- Exclusion of population, if knee-jerk steps are taken e.g. demonetization
- Poverty and destitution as rapid formalization imposes additional costs on informal economy
CGPCS Notes brings Prelims and Mains programs for CGPCS Prelims and CGPCS Mains Exam preparation. Various Programs initiated by CGPCS Notes are as follows:-