The Informal Sector or Informal Economy as Defined by Governments
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Transcript of informal sector
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PRESENTED BY :
INFORMAL SECTOR Its role in slum improvement
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INTRODUCTIO
N• The term “Informal
sector” has been
introduced in 1972 by
the International
Labor Organization
(ILO) in its Kenya
Mission Report.
DEFINITION
Informal sector
“The non-structured sector that has emerged in the
urban centers as a result of the incapacity of modern
sector to absorb new entrants”
--By ILO and UNDP.
According to NSSO Informal sector are
1. In case of manufacturing industries the enterprises
which are not covered under annual survey of industries
2.In case of service industries or enterprises run by
government i.e., central, state &ULBs or a corporate sector
will regarded as un organised
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Example :Near the K.R hospital, Mysore
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A Sector which encompasses all jobs with
normal hours and regular wages, and are
recognized as income sources on which
income taxes must be paid. Opposite
of informal sector
Formal Sector
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DIFFERENCE BETWEEN
FORMAL AND INFORMAL SECTOR
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MAIN FEATURES OF INFORMAL
SECTOR ECONOMIC UNITS
Ease of entry
Small scale of the activity
Self-employment, with a high proportion
of family workers & apprentices
Little capital & equipment
Labor intensive technologies
Low skills
Low level of organization with no access to
organized markets.
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CONCEPT OF INFORMAL SECTOR
informal sector includes heterogeneous
activities
Broadly, the informal sector activities can be
characterized into
• Tiny establishment-based activities
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HAWKERS – INFORMAL
SECTORHawkers are those people who offer goods or
services for sale from public places, primarily
streets and pavements.
In most Indian cities the urban poor survive by
working in the informal sector
Hawkers perform a number of services for the
urban population
Mobile units
Semi static units
Static units (stalls)
Processed food items
Unprocessed food items
Non food items
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Hawkers play an important role in the distribution
of small goods in all parts of the cities/ town
Survival strategies for those who work in that
Alternative to unemployment
Availability of necessary goods at affordable cost
ECONOMIC DIMENSION
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Concentration at location having high pedestrian
traffic
Conflict with formal/defined activities
Failure of city government to provide required
services at requested location
No space reserved for hawker in formal residential
areas
Services required by residents
Hawker tend to ‘encroach’ on pavements and other
public spaces
SPATIAL DIMENSION
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INFORMAL ECONOMY
About 370 million workers constituting 92% of the
total workforce in a country were employed in the
unorganized sector while formal sector of the
economy employees only 8% of the total work
force as per NSS Survey 1999-2000.
The contribution of the unorganized sector to the
net domestic product and its share in the total NDP
at current prices has been over 60%.
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Total estimated through
Infrequent surveys
Formal/
salaried
90% of employement is informal
By employement
By output (GDP)
Estimated GDP
50% of India's
GDP is informal
Source: national statistics commission, credit suisse estimates
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Source: Wikipédia
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POSITIVE ASPECTS OF INFORMAL
SECTOR
Employment generation
Functional shopping and convenience
Economic need
Supplement requirement
Competition
NEGATIVE ASPECTS OF INFORMAL
SECTOR
Traffic problem
Nuisance
Environmental
Corruption
Insecurity to resident
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HOW WE CAN IMPROVE OUR SLUMS
THROUGH INFORMAL SECTOR i.e., ITS
ROLE IN IMPROVEMENT
Encouraging the SHG and formation of their own
association for informal activities
Providing financial assistance
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Conducting job
oriental training
programs
.E.g. like candle making
Make provision in foot paths to sell & carry out
there business
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THE MASTER PLAN DELHI - 2001
PROVISION MADE FOR INFORMAL
SECTOR Norms for Informal Sector Trade, 1990
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Norms for Organized Informal Bazaars
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Conclusion
Informal sector is one which
helps the country like India
having most of the people
below poverty line and these
people not having capacity to
establish their business
formally and also it helps
increases their income which in
turn their living standards also
improved.
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Reference
• M.S.Ramanujan; I .C.Awasthi:Gayatri: Pandy:
Employment Promotion in urban informal sector:
New age internal publishers.
• P.R. Brahmanada: Indian Economy: deep
publications
• India Market Strategy by Neelkanth Mishra
• D.S. Meshram / ITPI Journal 4 : 3 (2007) 01 - 0
• http://www.businessdictionary.com/definition/formal-sector.