A Survey on Informal Sector in Dhaka Metropolis

Abstract

Informal sector enterprises that usually possess the following features- ease of entry, family ownership, small-scale operation, reliance on indigenous resources, use of labor intensive and adopted (often low-level) technology, acquisition of skills outside the formal schooling system, and unregulated and competitive market prevalence The magnitude of informal-entrepreneurial activities plays a decisive role in the economic development of the rural livelihoods, especially in third world countries. The contribution of the informal sector to the economy, particularly in terms of employment generation, is very large. According to one estimate, more than 60 per cent of those working in the non-agricultural sector are entered into the informal business sector in Asia. Due to a lack of employment opportunities in the public sector and in the private formal sector, many people are forced to join the informal business sector to earn a living. Although their earnings remain low and a large number are classified as poor, without the informal sector, their earnings would be negligible, and as a result the intensity of their poverty would be even more severe. Informal business sector has always been considered as a proven instrument to fight poverty in an effective manner. As a consequence, poverty alleviation through rural centric micro-entrepreneurship development has been focused for more than the last thirty five years in Bangladesh. There are a number of prevailing factors that spoil the development of informal-entrepreneurship in Bangladesh. Among all the factors, non-institutions encompassing various political, economic, social, cultural, technological, environmental and personal factors are affecting the scopes of operating these economic activities to a significant extent. This paper attempts to identify the present status of Informal Business sector in Dhaka metropolis and also tries to find some key non-institutional barriers that hinder the development of informal entrepreneurship in Bangladesh, and suggests a composite policy measure to overcome such encumbrances.