Informal Economy and Sustainable Development Goals: Ideas, Interventions and Challenges

Informal settlements are frequently located in hazardous areas with a high risk of natural disasters. Upgrading informal settlements can be difficult due to the time and expense needed to complete the process. This chapter advocates using a management framework of public services in informal settlements. In doing so, it addresses 17 of the 17 UN sustainable development goals (SDGs). The study reviewed the literature to investigate current ways of managing environmental enterprises in informal settlements in South Africa. Thereafter, the challenges of managing public services were explored, and a conceptual framework for managing public services by social enterprises in such communities was developed. The chapter found that environmental enterprises are classified as ‘green spaces’ and infrastructure, water and sanitation services, energy systems, and recycling initiatives. Essential aspects of sustainable community-based facilities management (SCbFM) for managing public services are maintenance, governance, community project management, environment service delivery, service performance, governance, community project management, environment service delivery, service performance, well-being and health and safety, disaster management, and finance. Some of the problems of managing public services in informal settlements include the limited skills of managers, the focus of government on new projects rather than managing existing projects, not choosing the right indicators to measure service performance, and limited guidelines for the health and safety of managers and disaster management. Thus, a new conceptual framework was needed and developed based on the principles of social capital and capability for managing services in informal settlements in South Africa.

The chapter explores the implications of digitalization on the informal economy of Ghana, focusing on the agricultural, microcredit, transportation, and retail sectors. The study was designed as a qualitative study with data collected from books, articles, government reports, business reports, and newspapers. The data collected were analyzed using qualitative content analysis. The study argues that in the agricultural sector, e-agriculture initiatives and digital tools have improved farming practices, providing timely scientific knowledge to farmers and increasing yields. The microcredit sector has been transformed through digital financial services, which have expanded financial inclusion, lowered costs, and simplified regulatory compliance. In the transportation sector, digital platforms like Uber and local startups have streamlined operations, improved safety, and created economic opportunities for drivers. Additionally, e-commerce platforms have facilitated stock ordering and delivery for retailers, reducing downtime and formalizing their transactions. These digital innovations are crucial in enhancing the formalization of the informal economy in Ghana, providing numerous benefits for businesses and individuals in these sectors.

Personal financial management is gaining momentum in modern society, as it plays a vital role in shaping the financial behaviour of people looking forward to adequate financial well-being. Hence, people in general and the weaker sections of society in particular are expected to show desirable financial behaviour for achieving individual as well as societal well-being. The present study investigates the impact of socio-economic characteristics on the financial behaviour of migrant workers who have migrated to the state of Tamil Nadu. The primary data were collected using the interview schedule from 200 migrant workers selected using the snowball sampling technique. The results show that migrant workers have mediocre financial behaviour. Furthermore, it is also found that migrant workers’ financial behaviour is not influenced by their socio-economic characteristics, such as gender, age, marital status, family type, and family income. However, the level of education has a significant positive role in shaping the financial behaviour of the migrant workers. The study outlines the need for specially engineered financial education for migrant workers.

This chapter explores an analytical method to understand the decades-long literature on informal lending in the informal sector. Assessing the predominance and interrelationships of numerous issues in informal loans in the informal economy helps in identifying emerging research trends. The analysis employs a method of investigation by thematically analyzing research publications indexed by Scopus from the first publication to 2023 using bibliometrix and PRISMA model in R Studio. Research ideas may be visualized using thematic slices and other visual representations that show their evolution and interconnectedness. Key concepts like “rural credit” and “informal sector” become apparent, shedding light on the evolution of these concepts through time with the help of thematic analysis. Findings on trending themes and tree maps improve thematic comprehension. The study majority restricted to thematic analysis in depth confined to available information. The results may be used as a road map for further study and policy choices in the field of informal lending. Informal lending research promotes financial inclusion and sustainable informal sector economic growth. This bibliometric analysis illuminates informal lending research themes and their consequences for informal economy issues. The results enhance informal lending research and policy development.

Industry 4.0 broadly implies the digital transformation of industrial works. In India’s industrial arena, the textile industry is extremely important in the non-farm sector, both regarding value addition and employment generation. This chapter attempts to think about new avenues of research while integrating different streams of literature. For example – literature on innovation, literature on the industrial ecosystem, literature on industry 4.0, and consequences for the Indian economy – all such streams of literature have been considered synoptically to think of a new research program. The focus of this research program is to explore pathways of synergizing these different literatures and thinking about how to integrate and apply innovations for the betterment of the unorganized manufacturing sector in India. The unorganized manufacturing sector is a vast area in India, so here, we focus on some specific sections of the textile sector which is the handloom weaving industry. How have changes in techniques happened within the handloom weaving sector so far? What are the possible ways of applying these new technologies in altering the products and processes within the textile sector? What can the government do in this regard? These are the research questions that need attention in today’s context, and we have not found serious works in this direction in the context of the Indian economy; hence, we are investigating these issues in this chapter.

The spatial concentration of the manufacturing employment and production is the general feature in all the economy. Indian economy is not an exception from this scenario. The spatial pattern of Indian manufacturing sector reports a significant regional disparity. Since manufacturing is becoming more vital in the Indian economy, it is essential to understand the spatial distribution of the manufacturing sector. This chapter provides a detailed picture of India’s spatial distribution pattern in formal and informal manufacturing sectors. Using the well-known Ellison–Glaeser index, we measure the industrial agglomeration for all National Industry Classification (NIC) three-digit industries and further incorporate statewise manufacturing activity distribution. From the analysis, it is evident that there is a substantial regional concentration of manufacturing activity; however, the recent regional distribution pattern also depicts some signs of industrial dispersion.

With the onset of globalization in developing economies, policymakers express serious concerns about the role of the informal economy, a concern also mirrored in the United Nations (UN) sustainable development goals (SDGs). Numerous attempts have been made to analyse the general equilibrium consequences of globalization in terms of foreign capital inflow on the informal sector in a developing economy. These studies examined the impact of foreign capital inflow through the channels of resource reallocation across sectors and adjustment in the factor and commodity prices. Nevertheless, the efficacy of these channels is contingent upon the assumption of perfectly competitive product markets that is pertinent in the majority of the studies. This chapter attempts to incorporate imperfect competition in the informal economy in a Heckscher–Ohlin-type multi-factor, multi-sector general equilibrium setup. We assume the existence of imperfection in both a homogeneous good-producing industry and a product-differentiating industry and examine how foreign capital inflow in the presence of imperfect competition affects the informal workers, industrial and firm output, product diversity, national income, and welfare. We also analyse how the consequences of foreign capital inflow on the informal economy can vary with the degree of product market imperfection. It is obtained that varying degrees of product market imperfection in the informal economy have only quantitative (magnitude) effects; however, qualitative (directional) effects remain unchanged.

The COVID-19 pandemic, starting in early 2020, has significantly compromised global commitment to the 2030 Agenda for Sustainable Development Goals, notably affecting areas like food security (SDG 2) and the economy (SDG 8). Informal economy platform employees have been among the most impacted. In India alone, 7.7 million workers in the informal economy have suffered, with nearly 90% of unskilled and semi-skilled workers experiencing income loss. The widespread income loss among a significant portion of the workforce has led to disruptions in demand and supply mechanisms, thereby worsening food insecurity. This study investigates the determinants of the food consumption score (FCS) to serve as an indicator of food security within informal-economy households. A longitudinal survey of 2,830 unskilled and semi-skilled employees, including drivers, domestic workers, delivery personnel, beauticians, street vendors, small business owners, and self-employed individuals, was conducted. The findings show a significant shift towards borderline household FCS during the pandemic, with a sharp decline in daily consumption of dairy products and non-vegetarian items, indicating reduced protein intake. Consuming two or fewer meals per day increases the likelihood of poor FCS, highlighting the need for systematic interventions to ensure three regular meals per day. Moreover, insufficient government support for adequate food intake in informal economy households calls for redesigned assistance programs. Policymakers should prioritize practical solutions, such as community-based food distribution centers and mobile food vans, to ensure the delivery of nutritious food to vulnerable populations in Bangalore.

This study attempts to evaluate the performance of women-dominated self-help groups (SHGs) in India and their contribution to financial inclusion. The two dimensions – spread and status of SHGs are considered to assess their performance level, where each of the dimensions has a few number of indicators. The study also constructs a composite financial inclusion index (FII) to calculate the FII values, which appear from the performance of SHGs, during the study period 2007–2021, in India. Finally, the study establishes a relationship between financial inclusion and human development since women’s involvement in financial inclusion is also conducive to human development. The study comes to the conclusion that despite success in achieving financial inclusion through promoting SHGs, the government should keep a focus on the ever-increasing amount of non-performing assets (NPA) of the banks since a part of that is related to the functioning of SHGs. However, the promotion of SHGs is fundamental for women empowerment, human development, and thereby, to ensure sustainable development.

Waste management has become a topical issue among scholars, practitioners, and industrialists. This study extends the debate on waste within informal communities, highlighting the functionalities of local assemblies in Ghana, a developing country context. This study utilized the desk research regime situated within the qualitative approach. Several sources of data, including key policy documents in context, were used to inform the conclusion reached. The results show a lack of independence of local assemblies to enforce waste management by-laws in informal communities. It further indicates that limited waste management departments within the metropolitan, municipal, and district assemblies (MMDAs) and a lack of funds are to blame for effectively managing waste and sanitation in the informal settlements. Being desk research, the findings of the study should be carefully interpreted to reflect similar settings and characteristics across national, regional, and international contexts. The study explored the nuance of waste and sanitation management and discovered some setbacks to effective waste management, as well as practical ways of addressing them. This research is one of the few to examine waste management and sanitation-related issues within informal communities in a developing country context.

The informal sector has become the most dominant sector in the Global South and can be seen in all sectors of the economy. The waste management sector is one of the major areas with many informal actors. This chapter examined how the collaboration of city authorities with informal waste actors (IWAs) can help improve the management of waste and address climate change issues. The study employed a qualitative case study where IWAs and leadership of the waste management department of the Accra Metropolitan Assembly (AMA) engaged in a workshop to gather information data. The findings showed that informal waste actors’ valuable contributions have changed city authorities’ perception of them from being a nuisance to key stakeholders in waste management. This recognition and collaboration go beyond seeing IWAs as partners in waste management but also as climate change mitigation agents.

Rural entrepreneurship is an important vehicle to drive sustainable rural development in India. The process of planning, starting, and operating a new business is termed as entrepreneurship. It has been described as having the ability and willingness to create, plan, and manage a business enterprise while accepting any risks involved to generate a profit. In India’s rural areas, enterprise and entrepreneurship are what fuel economic progress. A rural entrepreneur is someone who uses rural resources to develop products and establish enterprises that support the development of the rural economy and its growth potential. Although, these rural business owners encounter issues similar to those faced by urban business owners due to the rural setting in which they operate amplifies their difficulties. To reduce rural people’s migration and to support rural upliftment, it is necessary to encourage entrepreneurship and new employment opportunities. Consequently, rural entrepreneurship has the potential to greatly increase employment in rural areas. It is a more effective method of eradicating poverty and hunger, sustainable health and well-being, enhancing gender equality, quality education, decent work conditions, promoting innovation in industries, and ultimately reducing the inequalities which are mapped with the important agenda of the United Nation’s sustainable development goals (SDGs 2030). To bring about change, institutions must concentrate on the interactions between education, skill, entrepreneurship, and employment. This chapter explores the challenges and skills required for rural entrepreneurship in India, proposing a framework to enhance rural development through entrepreneurship.

The emergence of the gig economy, with the growth of technology and increased use of digital solutions, has been transforming the nature of work and its organisation in different ways. The differences in technical infrastructure, access to the internet, availability of cloud computing, and ownership of digital devices influence how countries manage this transition. Besides promoting economic growth and employment opportunities, the expansion of gig work offers wider possibilities for addressing some of the structural problems that the Indian economy has faced in recent years. In this chapter, we review the nature of the gig economy in the context of informalisation, flexibility, and vulnerability associated with gig work. In many contexts, gig workers are neither formal nor informal; they are independent contractors, enjoying no benefits as formal or informal workers do. We explore the links between gig workers and those workers engaged in the informal economy; both operate with a certain degree of flexibility but are vulnerable to many risks associated with occupation, health, and social problems. The discussion also highlights the importance of making gig work more inclusive by extending its flexible employment options to more women, persons with disabilities, and those from marginalised backgrounds and utilising the gig economy in formalising the economy in general.

The present chapter attempts to highlight the vulnerabilities of female migrants as compared to non-migrants in the unorganized urban labor market. Informal female migrants working in construction, as domestic workers, tailors/boutiques, and garment workers in the urban unorganized sector of Uttar Pradesh’s selected urban locations, are covered in this chapter. Though the fact prevails that workers in the unorganized labor markets are confronted with various livelihood crunches, still those who are migrants and swelling the urban labor markets are more prone to different vulnerabilities. There is scanty literature on the situation and condition of migrants particularly female migrant workers in India, whereas we know more about the condition of international migrants, mainly migrant workers in the Gulf and other regions. The study is based on interviews with 174 female informal workers who have migrated and 222 non-migrants from various regions of the state to the urban locations of selected cities. Our study also attempts to do an in-depth, qualitative exploration of these vulnerable women’s lives and perceptions and tries to capture layered vulnerabilities, risks, and rewards confronted due to both migration and work in the informal sector. Specifically, the findings reflect upon the fact that how strong societal norms may actually prevent women from acknowledging or articulating the true reasons for their migrations.

Middle East and North African (MENA) countries notoriously exhibit high prevalence of unemployment and informality among a large fraction of population and, at the same time, gender gaps in labour force participation and job mobility. Why is there such persistent labour market segmentation? What is the impact and potential of various formalisation policies in several MENA countries (Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia)? An overview of the informal economy is provided with respect to taxonomy, coverage and drivers. Transition matrices and multinomial logistic regressions are applied to longitudinal microdata from labour market panel surveys (LMPS) (in Egypt, Jordan and Tunisia), focusing on workers’ occupational mobility regarding their pre-existing status, age cohort, gender and other demographics. Persistent segmentation and low occupational mobility in all countries suggest that informal employment is not driven by choice on the labour supply side but by structural constraints on the demand side. Existing formalisation policies encapsulating distinct stick and carrot strategies and targeting business versus workers achieve rather modest impacts. Promoting social and solidarity enterprises and extending microfinance to informal enterprises are promising policies for the creation of decent jobs.

The chapter examines the employment status of women in the power loom sector by assessing their participation in this sector as well as in different major activities aside from power loom activities. The objective is to understand the time allocation of individuals who are related to the power loom sector and to evaluate the factors that affect the time spent in the sector. It has focused on women’s contribution to the power loom sector and discusses gender inequality in unpaid domestic chores. The study is based on primary data collected through in-depth interviews in the rural area of Benipur, Varanasi, Uttar Pradesh. This study found that women participate less than men across all age groups in the power-loom sector in the rural area of Benipur. Women have lower education qualifications than men at each level; however, they are more involved in education than men in their initial years of schooling. Women’s involvement in education declines with age, while men’s involvement does not. Due to low educational attainment, they face many difficulties in understanding this new technology of power loom. Domestic involvement of women might be a major reason behind their low participation in education as well as the power loom sector. Even today, ‘farming or agriculture’ is the most important major alternate activity for the livelihood of the people who are related to the power-loom sector. The key contribution of this chapter is to understand the employment status of women and evaluate the women’s contributions to the power loom sector.

This chapter elucidates the wage differential between male and female informal workers in urban labour market by using employment and unemployment survey 61st (2004–2005) round, 68th (2011–2012), and Periodic Labour Force Survey 2019–2020 data of National Sample Survey Office (NSSO) unit level data. This study found that gender inequality not only increased during getting job but also persists after getting job during wage distribution. Based on the Oaxaca–Blinder (OB) decomposition, it is revealed that gender wage inequality is more in the labour market due to the labour market discrimination, that is, unexplained components. Hence, this study helps researcher, policy makers and government to fix the gender wage discrimination issues exist in the Indian labour market. This will enhance economic growth through the rise of the women labour force participation.

India experiences enormous informalisation of employment which has become a global phenomenon in recent times. The quality of work, conditions of work and social security protection are important concerns in the growing informal sector. One of the sustainable development goals (SDGs) deals with ‘decent work’ for all. It is also reported that the inequalities and disparities in work participation and wage payment are high in the informal employment than the formal. Under this context, this study examined the status of informal employment in India by analysing different categories of informal employment, labour force participation rate (LFPR) and wage payments in detail. The aim of the study is to highlight the gender gap in these indicators of employment. The findings of the study show that there is an increase in the LFPR in both the usual and current weekly status (CWS) statuses in the course of all the periodical labour force surveys (PLFSs). The gender gap was prevalent not merely in the rural areas, but in the urban areas as well. The informal sector constitutes the highest share of employment in India, with self-employed individuals contributing the most. Half the workforce is not eligible for paid leave and other social security benefits, and wage disparities exist between rural and urban regions. This difference is found among both female and male wage workers in both the rural and urban regions. Female employees are much more vulnerable as there is a gender gap and a regional gap in wages paid to the regular employees.

In line with global initiatives, the state of Kerala in southern India is actively working towards formalizing its informal solid waste management (SWM) sector. Despite this, there is a dearth of studies on formalization processes, particularly focusing on the conditions of workers within this sector. This study addresses the gap by examining the challenges faced by women workers operating within the formalized framework of Kerala’s SWM sector. It aimed to investigate challenges faced by grassroots women workers in Kerala’s SWM sector during its transition from informal to formal, identifying gaps in the process through their experiences. Using a qualitative methodology, the research gathered data from 10 women workers in the SWM sector in Kozhikode, Kerala, who were part of the Haritha Karma Sena (green task force). Thematic analysis of in-depth interviews revealed two major challenges faced by these women. Firstly, there was a negative societal perception towards them, and secondly, there was a lack of appropriate state response to their needs and requirements. These challenges were attributed to gaps and pitfalls in the formalization process, leading to a lowered socio-economic status for the women, increased vulnerability to health hazards, and societal stigma. The findings underscore the need for significant improvements in the formalization process of Kerala’s waste management sector. The study advocates for targeted policy interventions to enhance the working conditions of SWM workers, emphasizing the importance of expediting and streamlining the formalization process. This, in turn, would contribute to the overall effectiveness of the SWM system in the state.