Informal Sector: Emerging Issues and Labour Market

Abstract

National Commission on Enterprises in the Unorganized Sector (NCEUS) estimated that more than 91 percent of workforce in Indian economy is engaged in informal sector. Informal sector in the developing countries primarily consists of unregulated small but productive activities which are survival activities for poor. The informal sector is a product of rational behaviour on the part of entrepreneurs that desires to escape state regulations. With changing economic structure, the pattern of informal activities also changes. Present paper is an attempt to analyze the major issues in general and labour market issues in particular in the informal sector. The paper is divided in to five sections. First section deals with definitional aspects of informal sector and second section deals with the size of informal sector. Third section focuses on the role of informal sector and fourth section covers emerging issues in the informal sector. Final section concludes the paper with major policy recommendations.