Evaluating the impact of the digital economy on informal and Unorganised Sectors' Well-being in Delhi

 Corresponding author: Gayatri Mallick. Copyright © 2025 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0. Evaluating the impact of the digital economy on informal and Unorganised Sectors' Well-being in Delhi Gayatri Mallick * and Sonia Singla Department of Economics, Faculty of Humanities, Social Science and Fine Arts, Mewar University,312901, Rajasthan, India. World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 Publication history: Received on 18 June 2025; revised on 24 July 2025; accepted on 26 July 2025 Article DOI: https://doi.org/10.30574/wjarr.2025.27.1.2787 Abstract India's informal and unorganised sector employs over 90% of the workforce and accounts for roughly half of GDP, although it is mainly excluded from formal economic frameworks. With the Digital India program, Aadhaar integration, UPI, and mobile internet, India's digital economy has experienced significant acceleration, opening up new opportunities for greater inclusion. Street vendors now have more opportunities to generate revenue, reach customers, and promote financial inclusion, thanks to the growth of digital platforms, mobile banking, and fintech solutions. This study examines the multifaceted effects of the digital economy on the revenue trends of street sellers in Delhi NCR. This review article examines recent literature, policy frameworks, and empirical findings on the impact of digital technologies on income generation, financial access, and business models in the informal sector. The research uses Amartya Sen's Capability Approach to analyse the effects, drawing on multidisciplinary sources and national-level data. Key findings include growing usage of digital payments, more engagement in e-commerce, enhanced credit availability through government initiatives, and the rise of gig work platforms. However, constraints such as digital literacy, platform dependence, and infrastructure inequities persist. Five figures and tables present a visual picture of adoption trends, income changes, demographic usage patterns, and obstacles. The study finishes with specific proposals for improving inclusive digital infrastructure, governance, and worker safeguards in India's emerging informal sector. Keywords: Informal Worker; Capability Approach; Digital Inclusion; Delhi; UPI 1. Introduction The Indian economy is undergoing a structural shift, fueled by digitalisation. With over 800 million internet users and nearly 400 million UPI users by 2025, the digital ecosystem is changing the way people work, transact, and interact with markets. While much emphasis has been placed on startups and official enterprises, the informal and unorganized sector which includes street sellers, daily wage earners, gig workers, and micro-entrepreneurs forms the backbone of India's economy.This article seeks to analyse how the digital economy affects income and living circumstances in India's informal sector. It investigates how digital technologies, ranging from mobile payments to online markets, are transforming earning opportunities, transaction efficiency, and financial inclusion for the informal sector. 2. Literature review The digital economy, broadly defined, refers to economic activity enabled by digital technologies such as mobile banking in Khobragade A. (11) applications, cloud services, digital platforms, and financial technology. The studies covered by Ghosh (2), Qiang (7) demonstrate how digital technologies helps women workers to increase productivity, lower prices, and allow for market access and internet digital accessibility in Joseph (10). However, in developing economies, Sen (1) World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2243 is useful for assessing not only income but also the actual freedoms and choices of personal interaction in online grouping in Hung (9) that digital access providers. Chatterjee (4) highlights the financial platform for informal workforce's vulnerability to digital exclusion. Mehrotra and Parida, Arindrajit (3) found that, while digital payments and schemes such as PM SVANidhi are good, digital illiteracy, gender divide, and network limitations limit full participation. The Zaker (8) gig economy also has varied evidence. Platforms such as Swiggy, Urban Company, and Ola have provided income opportunities; however, they frequently result in irregular work and a lack of social security in digital labour platform of Bergs study (5). As a result, it is vital to investigate whether the digital economy promotes dignified, longterm income development in the informal sector 3. Material and methods 3.1. Mixed-method approach Quantitative data from NSSO 2018, PLFS 2023, the RBI digital payments index, and the PM SVANidhi dashboard were used to track digital adoption and income patterns. Qualitative Insights: Fifty field interviews were done with street vendors, gig workers, domestic workers, and kirana shop owners in Delhi NCR. Theoretical Lens: The Capability Approach was utilized to assess not only economic gains, but also whether people obtained true control over their lives. This can be illustrated by below figure and table. Figure 1 UPI and QR code adoption by the informal sector Figure 1 shows strong digital adoption among Kirana stores (82%) and relatively lower but still substantial usage among street vendors (68%) and gig workers (74%). World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2244 Table 1 Government Schemes Impacting Informal Digital Inclusion Government schemes impacted on the informal sector by PM SVANidhi, Jan Dhan Yojna, ONDC and Digital India Mission, Mudra Yojna to all informal workers. Govt schemes are forced to adopt digital payment for street workers. The analysis of income between digital users and non-users is shown in Figure (2) below. Figure 2 Changes in Income of Post-Digital Adoption In contrast to non-digital users (₹11,300), informal workers who embraced digital tools (such as UPI and e-commerce platforms) reported a much higher average monthly income (₹15,800), as seen in Figure (2). This study also explores accessing of digital transaction among urban men and women in Delhi shown in figure (3) below World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2245 Figure 3 Digital Access Gap by Gender and Region The disparity in digital access by gender and geography is depicted in Figure (3). There is a pronounced confluence of digital, gender, and geographic inequalities, with urban men having the greatest access (78%), while rural women continue to be the most excluded (38%). Informal workers' satisfaction with digital platforms (n = 500). Perceived benefits were shown by the majority's expression of contentment (38%) or strong satisfaction (23%). Nonetheless, 17% expressed discontent, shown in Figure (4), frequently as a result of inconsistent platform policies or a lack of assistance. Figure 4 Likert Scale of Informal Employee Satisfaction with Digital Platforms An explanation for inclusion based on a poll of 500 respondents, this bar chart illustrates how satisfied informal labourers such as street vendors, gig workers, and home-based artisans are with digital platforms. Figure 5 Comparison of Digital and Non-Digital MSME World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2246 3.2. Description for inclusion Using a sample of 250 companies, this clustered bar chart contrasts the market reach and supply chain efficiency of digitally and non-digitally enabled micro and midsize enterprises (MSMEs). Figure 5 Comparison of Digital and Non-Digital MSMEs on Key Performance Indicators (n=250) is the manuscript's caption. Because they have access to real-time orders, digital payments, and platform visibility, digitally connected MSMEs report a much wider market reach and more effective supply chain operations. 4. Results And Discussion 4.1. Digital Payment Adoption and Income Increase The introduction of UPI and QR-code-based payments has reduced cash handling risks, increased transaction transparency, and attracted tech-savvy customers.74% of polled street merchants who use UPI reported a 15-25% boost in daily sales.Consumers' direct digital payments reduced dependence on middlemen in rural haat markets. 4.1.1. Access to Digital Credit. Small vendors gained digital access to working capital loans through schemes such as PM SVANidhi. Forty-three per cent of PM SVANidhi beneficiaries reported increased inventory turnover after receiving the loan. However, challenges persisted, including complicated paperwork despite the process being "digital", awareness gaps, and digital score-based exclusion. 4.1.2. Platform and Informal Gig Jobs During COVID-19, gig platforms offered alternative sources of income.Fifty-eight per cent of platform workers in cities earned more than their previous informal jobs.Nonetheless, algorithmic pricing, opaque incentives, and the absence of social security reduced income predictability. 4.1.3. E-commerce and Digital Marketing Small artisans and home-based workers, particularly women, used WhatsApp, Meesho, and Instagram to run microbusinesses. Online exposure expanded the customer base beyond local locations.Logistics expenses, refunds, and a lack of internet knowledge were major barriers. 4.1.4. Barriers to Inclusion Digital Literacy: 63% of women in rural Bihar were hesitant to use even basic apps. Language and Interface Issues: English is the dominant language on most platforms. Device Access: Shared smartphones diminish privacy and control over the business. 4.1.5. Network Connectivity: There are still bottlenecks in remote locations with 3G speeds. The digital economy represents a double-edged sword. While it has created new income opportunities and increased financial inclusion, it also has the potential to exacerbate inequality if structural impediments remain in place. Workers in the informal sector are active participants in these transformations, rather than passive recipients. 4.2. Capability Approach Enhanced functions include the ability to transact digitally, save money, and reach out to distant customers. Unfreedoms remain in insufficient awareness, a lack of grievance resolution on platforms, and algorithmic control. Informal work is irregular, unregulated, and vulnerable, making digital inclusion all the more important. However, policy design frequently assumes consumers are digitally ready, ignoring the importance of 'last mile' human support and trust-based outreach. Policy implications in well-being approach needs to promote digital equity and revenue development in the informal sector, the following proposals are made: Digital Literacy and Handholding and Localized digital literacy initiatives, particularly for women and the elderly, informal workers. Community-based "Digital Doots" (ambassadors) will give continuing support. Platform Accountability is Mandatory disclosure of gig worker compensation and algorithmic adjustments. Enforce minimum wage or social security provisions through digital networks is necessary. Infrastructure and Device Subsidy should available in Marketplaces and rural clusters with public Wi-Fi zones and Smartphone subsidy plans for verified informal workers. World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2247 Inclusive Financial Services also provides to Micro-insurance, savings, and credit products are connected with UPI and Aadhaar. KYC regulations are flexible for persons who do not have a formal address or ID.Data Protection and Consent is mandatory for Informal workers must be taught on their data rights and Create grievance mechanisms for data misuse or fraudulent platforms. 5. Conclusion India’s informal sector is in a precarious state of Delhi. Traditional company models, financial access, and market reach have all begun to change as a result of digitalisation. To translate digital access into genuine economic growth and livelihood security, a complex, inclusive, and context-sensitive policy framework is required. This report emphasizes that technology alone does not guarantee empowerment; it must be combined with trustbuilding, training, and institutional support. If properly utilized, the digital economy has the potential to go beyond economic inclusion and encourage dignity, agency, and competence expansion for India's most marginalised workers. Compliance with ethical standards Acknowledgments I would like thanks to Mewar University, Department of Economics and my Supervisor for support. Disclosure of conflict of interest There is no conflict of interest. Statement of ethical approval The present research work does not contain any studies involving animal/human subjects performed by any of the authors. Statement of informed consent Informed consent was obtained from all individual participants included in the study. References [1] Sen, Amartya. Freedom as Development, (1999)Oxford University Press. [2] Ghosh. A., Ramachandran. R, Zaidi. M.. An Exploratory Study: Women Workers in the Gig Economy in India.2021 Institute of Social Studies Trust. [3] Arindrajit Dube et al., “Monopsony in Online Labor Markets”, American Economic Review: Insights 2, No. 1 ,2020, 33–46. [4] Chatterjee, A., D'cruze, N. A., Kumar, A., Ponnathpur, R., & Singh, A. Literature Review: Finances of Platform Workers in India. Chennai. 2021Dvara Research. [5] Berg, J., Furrer, M., Harmon, E., Rani, U., & Silberman, M. S. Digital labour platforms and the future of work.2018 international Labour Office.] [6] PM SVANidhi Dashboard,https://www.pmsvanidhi.mohua.gov.in/Home/PMSDashboard 2024 RBI Digital Payment Index [7] C.Z. Qiang and associates (2021). A review of the digital economy in developing nations. World Bank. [8] Zaker UI Oman 1, Kanak Bhati and Anas Ahmed, the rise of the gig economy in India: Market domination and the need to regulate the future of work,2025, DOI: https://doi.org/10.30574/wjarr.25.3.0935. [9] Hung, S.-W., Cheng, M.-J., & Lee, C.-J. A new mechanism for purchasing through personal interactions: fairness, trust and social influence in online group buying. Information Technology & People, 2022, 35(5), 1563–1589. https://doi.org/10.1108/ITP-05-2020-0329. World Journal of Advanced Research and Reviews, 2025, 27(01), 2242-2248 2248 [10] Joseph-Vaidyan, K. V. Factors that enhance customer trust in e-commerce websites: An examination of ecommerce success metrics using Internet audience rating (Doctoral dissertation, Capella University). ProQuest Dissertations Publishing,2008. [11] Khobragade, A., Balachandran, R., Gupta, B., Saroy, R., Awasthy, S., Singh, G., Misra, R., & Dhal, S. Mobile banking adoption for financial inclusion: insights from rural West Bengal. Journal of Social and Economic Development. 2024, https://doi.org/10.1007/s40847-024-00376-y Author’s short biography Gayatri Mallick is a research Scholar at Mewar University, Chittorgarh, NH-48, Gangrar, Rajasthan-312901, India, gayatri.malli[email protected]. She is also a research fellow in economics at Mewar University. She works on the digital economy and its impacts through technological innovation, especially focusing on social changes, health issues among women's street vendors. She has already published 4 research papers in Scopus-indexed Journals as a Co-author. She has already presented his research works at 2 International Conferences and 1 National Seminar. Sonia Singla is an Associate Professor in the Department of Economics at Mewar University, Chittorgarh, NH-48, Gangrar, Rajasthan-312901, India, [email protected]. She has a PhD degree in development economics and is researching the digital economy. She has awarded four PhD students. She is the head of the Department. She has already published 2 research papers in Scopus-indexed journals and other articles in UGC Care.