Nelaturu Sreekanth ReddyAIR 151 · CSE 2024 · 173 wordsTheir whole copy
Opening · a definition
Informal Sector is that part of economy which is neither taxed nor monitored directly by any form of government.
Body · points
Importance of informal sector in developing Economies
→ Modern marxists argue that informal sector provides cheap labour for the development of Capitalistic industries.
→ They provide employment to Uneducated and low skill labour
→ According to functionalist school of thought informal sector is functional as it promotes GDP growth along with, helping people to get basic needs for survival.
→ Informal sector is a breeding ground for entrepreneurship as it allows to start new small business without much regulatory barriers.
→ Informal sector creates new social networks and groups for improving collective bargaining power.
→ Informal sector also absorbs labour surplus in formal economy during the anomic times.
Challenges to informal sector
Close · a way forward
↳ Exploitation of working class ↳ Migration of informal workers creates conflicts. ↳ Women face sexual harassment ↳ Nepotism and lack of social security.
Recognising and addressing the informal sector complexities is crucial for achieving sustainable and equitable economic development.