Nepalese people are still worried for peace to raise the level of its economic growth and
development. Each year 400,000 labour force are introducing into labour market for
search of work. Majority of them find shelter in the informal economy in the absence of
lethargic growing formal economy. Most of the people are engaged in the informal
sector that has varying effects on them in terms of employment and income generation.
The Classification of informal sector activities shows us that the development status of
our country is very low compare to other countries. Under this study it is inferred that
although the informal activities are diversified between rural and urban areas, various
other characteristics suggest that there is a tendency to engage in more productive
enterprises even within informal sector, where the effect of sex and age is well defined
in terms of their preferences for the nature of activities in which they get engaged and
the size of the activities which they try to take forward. This study also tries to compare
the nature and characteristics of informal sector at national level. The government
must play effective role for better development of the informal sector. To identify the
informal economy in Nepal a national wide and regular survey should be necessary
before to apply any policy for this sector.