informal sector

PRESENTED BY :

INFORMAL SECTOR Its role in slum improvement

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

Example :Near the K.R hospital, Mysore

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

DIFFERENCE BETWEEN

FORMAL AND INFORMAL SECTOR

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.

CONCEPT OF INFORMAL SECTOR

informal sector includes heterogeneous

activities

Broadly, the informal sector activities can be

characterized into

• Tiny establishment-based activities

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

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

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

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%.

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

Source: Wikipédia

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

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

Conducting job

oriental training

programs

.E.g. like candle making

Make provision in foot paths to sell & carry out

there business

THE MASTER PLAN DELHI - 2001

PROVISION MADE FOR INFORMAL

SECTOR Norms for Informal Sector Trade, 1990

Norms for Organized Informal Bazaars

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.

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.