When the landlocked Himalayan kingdom of Nepal is still struggling to raise the level of
its economic growth and development, majority of the people find refuge in the informal
sector in the absence of slow growing formal sector. The present micro level study is
about the rural and urban locations of the Chitwan district, also known as ‘Rapti Valley’.
Most of the people are engaged in the informal sector that has varying effects on them in
terms of income generation. The latter seems to be determined mainly by the household
property, level of literacy and the number of persons employed in any unit. Although
there is no apparent differentiation in the income earnings between males and females,
the latter seem to be more efficient and articulate in many ways. Income earnings have
been higher in the urban location than the rural. Income level and the factors
determining it seems to vary among different social groups in the district. For a better
development of the informal sector, government must play the role of effective facilitator