Abstract

Theoretical research on the development dynamics in India as also in other developing countries has stipulated several characteristics of the informal sector in terms of technology, production relations, conditions of work and workers, among others. It also envisages certain types of relationship between the formal and informal sector. Unfortunately, empirical studies analysing the pattern of growth of the informal sector at the national or state level have generally used a single criterion such as the number of workers, capital employed, and use of electricity or registration with certain public agencies as the basis for identification of the informal sector (Mathur, 1993). This is mainly due to limited availability of data from secondary sources and problems of temporal comparability therein. Understandably, development economists have found this approach, based on limited indicators, inadequate and unsatisfactory for capturing the gamut of informal activities (Bromley, 1994; Breman, 1995; Nurul Amin, 1996; Nagamine 1996). They have argued that some of the crucial characteristics of the informal sector pertaining to labour relations, producer-trader nexus, linkage with the government and other formal agencies, considered important in the theoretical literature, have been ignored in macro level analyses using secondary data. Several scholars have gone in for a more rigorous identification of this sector using complex and multifarious indicators. This could only be done based on survey data. Understandably, they could conduct such detailed analysis only at the settlement level

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