The phenomenon of economic development is a composite of several factors, which may not

necessarily have economic connotations; the contribution of human resource to economic

growth of any country cannot be overemphasized, especially in a country like India which is
still reeling under the pressures of its mammoth population and limited capital resource. The
Indian economy can well be studied in two distinct sectors, organized and unorganized
(informal). The widespread informal (IS) sector in the country is a major contributor
to its development.
The concept of the informal sector was first coined in an International Labour Organization
(ILO) study of urban labor markets in Ghana (Hart, 1973). It was subsequently used in ILO
reports of labor market conditions in other African cities and by the World Bank in a series of
studies of urbanization and poverty throughout the Third World (Sethuraman, 1981; Mazumdar,
1975). In its application to issues of equity, economic opportunity, and social development, the
term "informal economy" first came into widespread use as a means of describing a dualistic
economic structure found in developing countries. Such an economy involves both the
mainstream formal economy and an unofficial economy within which economic transactions
occur outside traditional channels and deliver explicit economic and social benefits. The concept
has evolved to encompass various types of cash and non-cash transaction in both developing and
industrialized economies-transactions that benefit both the poor and non-poor.
In fact, there are detailed studies which estimate that as much as 50 percent of non-agricultural
GDP can be attributed to the IS in sub-Saharan Africa, Asia and Latin America .There are also
some evidence to show that the poor in most developing countries resort to IS activities as an
escape route out of poverty women worldwide are under-represented in high income activities
and over-represented in low income activities (notably, subcontract work) What are the links
between being a woman, working in the informal sector, and contributing to growth? Even
though the average earnings of women in the informal sector are low, the female informal
workforce contributes significantly to gross domestic product (GDP).
--------------------------------------------------------------------------------------------------------------------The concept of the informal sector was introduced into international usage in 1972 by the International Labor
Organization (ILO) in its Kenya Mission Report, which defined informality as a way of doing things characterized by a) ease

of entry; (b) reliance on indigenous resources; (c) family ownership; (d) small scale operations; (e) labor intensive and
adaptive technology; (e) skills acquired outside of the formal sector; (g) unregulated and competitive markets.

Women informal traders contribute a significant share (20-65%) of GDP in the trading sector.
For those countries where data is available, the contribution of women in the informal sector to
total GDP is greater than their share of employment in the informal sector. This is because
women are more likely than men to engage in multiple activities in the informal sector,
significant share of the workforce in key export industries, particularly those that involve simple
manual tasks, labor- intensive operations, simple machines, or portable technology. For instance,
homework is predominant in clothing and textile industries, the leather and footwear industries,
carpet making, and, increasingly, electronics. In Asia and Latin America, for example, home
workers account for 30-60 percent of the workforce in key export industries such as textiles,
garments, and footwear.
Given the disadvantaged position of women in the labor market in most parts of the developing
world, the result of long-standing societal norms which discourage the social and economic
integration and advancement of women the majority of female workers are in the informal sector.
This is especially true for sub-Saharan Africa and South Asia. It is also evident that female
workers rely more on the informal sector than men the shares of female non-agricultural
employment in the informal sector are generally (and often substantially) higher than those for
male workers. But women's participation in terms of their share of informal sector employment
is more mixed. Recent evidence shows extremely low shares in North Africa (for example,
Tunisia: 18.1 percent) for selected countries in Latin America.15and South Asia (for example,
India: 47.7 percent) and near even shares in Southeast Asia (e.g., Thailand: 48 percent;
Philippines: 52 percent). No pattern was apparent for sub-Saharan Africa and Latin America;
there is, however, some evidence of very large female shares in informal employment in subSaharan Africa (Benin: 62 percent; Kenya: 60 percent; South Africa: 61 percent). Not with
standing, there is strong evidence that, in most countries, women are over-represented in the
informal or, that is, their share in informal sector employment is higher than their share in total
labor force. This is in stark contrast to women's extreme under representation in the formal sector

employment. In terms of occupational distribution within the informal sector, women are more
likely to be employed in manufacturing, trade, and services than in construction and transport.
In India, almost 94% of total women workers are engaged in informal sector, of which
about 20% work in the urban centers. Majority of women workers in informal sector come from
those sections of the society which need income at any cost. Nearly 50 per cent of these women
workers are sole supporters of their families. Another startling fact is that out of all women
workers a mere 7.5% are availing the membership of authentic registered trade unions. Yet
another fact to cause concern is that women have to work, unpaid, even outside home, for
some 5-8 hours to help their other family members. This fact has to be considered alongside
the fact that an average woman has to work at home for some 7-8 hours doing household
chores including upbringing the children. Most of the women workers lack proper training.
They have very few options to avail as far as gainful jobs are concerned. The quiet contributors
to the effortless movement of the social carriage, the women workers engaged in
informal sector are poor, perhaps poorest amongst poor, uneducated and weak. Though they
have contribute a lot for employment and National income, they are still excluded from
National labour legislation, income taxation, social protection and entitlement to certain benefits
like paid leave, sick leave etc., Hence, the IS is far too important to be left to itself or for
governments and donors to downplay. Thus, development practitioners and governments should
strive to find policies and programs which harness the potential this sector. It should focus on
developing sustainable growth of this sector through its effective rules and policies.
By N.Kalithasammal
(Professor Dept. of Economics)