'Informal economy affecting production, labour market, revenue collection'

Kathmandu, July 15: The impacts of a significant chunk of informal economy have witnessed on the labour market, resulting to a legal gap between the employees and employers, stakeholders argued at a programme in the Capital City today.     

At a programme on 'Importance and progress on formalization of economy in Nepal's context' organized by the Federation of Nepalese Chambers of Commerce and Industries (FNCCI), the speakers said the increased size of the informal economy has impacted the production, labour market and the revenue collection as well.     

President of FNCCI Chandra Prasad Dhakal said maintaining healthy labour relations was highly essential adding that formalization of business, industry and service sectors was a must for this to happen. Formal economy also promotes the workers' welfare, Dhakal argued.     

He viewed that production and revenue collection were affected after the rise in the informal economy."Our competitive capacity will rise if informal economy was made formal," Dhakal added.     

Former secretary Mahesh Dahal also said that informal economy was a serious challenge in the developing and under-developed countries. He stated that several laws including Labour Act, Trade Union Act, Bonus Act and others were not implemented for the workers of the informal sector.     

Joint Secretary of Ministry of Labour, Employment and Social Security Pradip Kumar Koirala admitted that the workers from the informal sector could not be brought to the scope of the social security and the home-based workers could not be brought on board the formal channel.     

Koirala stated that the employers could not be even identified in the informal sector and this has added to challenges for the formalization process.     

The stakeholders have suggested that the informal sector's labour should be gradually transformed into the formal one and the details of the labourers should be timely updated to ensure their right to the social security.     

A study from the Tribhuvan University (TU) claims that informal sector represents 42 percent of Nepal's economy at present.(RSS)