Informal Sector contributes significantly to employment generation and national income in developing economies, such as India. The unorganized sector (enterprises outside general government, corporations and cooperatives) in India accounted for 93% of total employment including agriculture and 82.4% of employment in non-agricultural economic activities, according to the survey on employment and unemployment carried out by the National Sample Survey Organisation (NSSO) in the year 2004-05. This sector contributed 57.1% to the total net domestic product (NDP) and 49% in non-agricultural NDP in 2007-08. The size of informal sector should be similar in most other developing economies and it is, therefore, important that reliable data on this sector is available.
The attempt to measure employment and value added in informal sector in the developing countries led to the research agenda for identifying a set of enterprises/establishments coming under the purview of informal nature of carrying out the economic activities, so that surveys can be focused on these units to measure their employment and output. The proceedings of 15th ICLS on informal sector (1993) and its mentioning in the System of National Accounts 1993 were some of the initial documents, which have called for further work on measurement and preparation of separate set of economic accounts for the informal sector. Subsequently, the “Expert Group on Informal Sector Statistics” commonly known as the “Delhi Group” was set up in 1997 as one of the City Groups of United Nations Statistical Commission (UNSC) to address various methodological issues involved in the treatment of informal sector. The Delhi Group held so far 10 meetings since its inception and made significant contributions in the area of informal sector.
This paper puts together the work done jointly by the ILO and the Delhi Group so far on the measurement of informal sector and informal employment. The experience of India in carrying out surveys on informal sector is also presented in the paper.