The Rise of Shadow Entrepreneurship.
                     THE RISE OF SHADOW 
ENTREPRENEURSHIP
INTRODUCTIO
N
• There has been a global rise of 
shadow entrepreneurship, in 
various sectors such as 
education (certificates), finance 
(for easy loans), the betting 
economy (online games) and 
healthcare (e-pharmacies).
Source: www.drishtiias.com
SHADOW 
ENTREPRENEURS 
• Shadow entrepreneurs are 
those who do not register their 
businesses but manage to sell 
legitimate goods and services.
Source: www.drishtiias.com
EVADE TAXES
• These entrepreneurs evade 
taxes and operate outside the 
reach of government 
authorities.
Source: www.drishtiias.com
BENEFITS
• It is surprising to note that most 
of the informal sector jobs 
come under shadow 
entrepreneurship. 
• It also boosts the economic 
development of a nation. 
Source: www. 
jagranjosh.com
REDUCE 
POVERTY
• Shadow businesses helps in 
reducing the poverty. 
• It provides non-agriculture jobs, 
thereby removing pressure on 
agriculture. 
Source: www. 
jagranjosh.com
THE RISE IN SHADOW 
ENTREPRENEURS
• Amid the ongoing COVID-19 
pandemic and subsequent 
lockdown, shadow 
entrepreneurs have offered 
technology-mediated services 
to the consumers which the 
traditional service providers 
were constrained to offer. 
Source: www. 
jagranjosh.com
INFORMAL SECTOR
• High tax rates and less strict 
enforcement has led to tax 
evasion and has driven 
entrepreneurial activity towards 
the informal sector. 
Source: www. 
jagranjosh.com
CHALLENGES
• Most of the time, small firms 
are acquired by large firms, 
thereby reducing 
competitiveness. 
Source: www. 
jagranjosh.com
CHARGE HIGH 
INTEREST
• Several app-based loan 
providers charge high interest 
on loans and use questionable 
methods for the recovery of 
loans. 
Source: www. 
jagranjosh.com
OPERATION
• There is a loss in the revenue as 
these businesses are not 
registered with the government 
and operate in the shadow 
economy.
• They operate outside the reach 
of government officials. 
Source: www. 
jagranjosh.com