Among the loudest critics of the demonetisation policy are those who predict doom for India’s informal sector as a result of this exogenous shock. Numerous anecdotes are being forwarded to highlight the suffering of daily wage earners and informal labourers across the country. Let us use this opportunity to critically evaluate the factors that have contributed to keeping approximately 83% of India’s labour force informal, despite 25 years of modest growth in a seemingly liberalized economy. The most authentic estimates of the size of informal labour market in India are from the National Sample Survey Office, which holds employment-unemployment rounds every few years. The data shows little has changed over the years in the nature of employment, as size the of the informal labour market remained significantly high and predominant in the economy overall. In 2004-05, the composition of organized vs unorganized was 13:87; while in 2011-12, this had changed to 17:83. The growth in organized...