Question

 Define the informal sector of urban economy. Describe the key features of urban informal
economy.

22 Jul 2026
Answer :
Word Count : 710
The informal sector of the urban economy refers to economic activities that operate outside the formal legal and regulatory framework of the government. It includes small-scale, unregistered, and labor-intensive enterprises that are generally not covered by taxation, labor laws, or social security systems. The concept of the informal sector was first popularized by the International Labour Organization (ILO) in the early 1970s while studying employment patterns in developing countries. In urban geography, the informal sector plays a crucial role in shaping the economic structure of cities, particularly in developing nations where rapid urbanization, population growth, and limited formal employment opportunities force a large section of the workforce into informal occupations. The urban informal economy encompasses a wide range of activities such as street vending, domestic work, construction labor, auto-rickshaw driving, waste collection and recycling, home-based manufacturing, tailoring, food stalls, repair services, and small retail businesses. These activities provide employment and income to millions of urban residents who cannot find jobs in the formal sector. One of the most important features of the urban informal economy is the ease
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