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Disadvantages Of Informal Sector

1387 Words6 Pages

Table of Contents
Contents
Urban Informal Sector 3
Characteristics of Informal Sector 3
Advantages of Informal Sector 4
Disadvantages of Informal Sector 4
Positive Impact 4
Negative Impact 5
Conclusion 5
References 6

Urban Informal Sector
It is part of the economy which is called the grey economy because it is neither added in the Gross domestic product (GDP) or Gross national product (GNP) of a country. This part of the economy is also neither taxed nor monitored by the country’s government. The sector is prevalent mainly in the developing countries giving opportunities to the poor and mostly the uneducated of the country.
The term Informal Sector describes the employment which is outside of the Industrial sector and it is also termed as an employment which has no job security, fringe benefits or perks and avoids licensing costs. This sector hides itself from the wrath of Government taxes which then attracts many people. Many illegal activities also are part of the informal sector.
The income is low in the Informal sector due to no government rules being followed by the sector such as minimum wages. The workers in the sector do not have representation, welfare protection or work security or rights. Examples of Informal Sector include: Home tuitions, Facebook selling of merchandise, tailors, labors such as drivers, cooks, guard, helpers in shops and homes, shoe shines and some transport services, mechanics, plumbers, fruits and vegetable stalls, Fries and corn stalls

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