The informal economy is a global and pervasive phenomenon. According to Internal Labour Organisation approximately 60 percent of the world’s population participates in the informal sector. Although this is mostly prevalent in emerging and developing economies, it is also an important part of advanced economies. In developing countries like India, large share of the population typically depends upon the informal economy. The economic growth and development in general and livelihood and wages in particular of the vast majority of workers in India crucially depend on the economic viability of the informal sectors. According to Periodic Labour Force Survey over 90 percent of workers in India are informal workers. Out of these those engaged in rural areas is significantly more than urban areas. This is primarily because a large number of informal workers are engaged in farm or agricultural activites. Those in urban areas are involved primarily in manufacturing, trade, hotel and restaurant; construction; transport; storage and communications; and finance, business and real estate. There are various challenges and opportunities vis a vis informal economy and several steps have been taken to tackle those challenges.
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