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Govt to regulate informal sector



"Growing informal sector could be a great risk to the country where post-conflict management is weak"

KATHMANDU: The government is building a legal ground to regulate the informal sector as the outsourcing business has been growing in the country. The growing informal sector has become a headache for the government, so we are incorporating the informal sector in labour laws and policies, said secretary of the ministry of labour and employment Suresh Man Shrestha.

The ministry has been implementing a project to identify the informal sector to incorporate it in the labour law since 2012. “We are taking a challenge to bring the informal sector into labour laws and social security net. All stakeholders must support the drive,” he said, adding that garments and carpets could be the potential sectors to address at first.

The International Labour Organisation and the Japanese government have been supporting the project that started exploring the informal sector from 2012 and which will last till 2017, and bring the informal sector into the legal framework. The ministry has been executing the project with a budget of $ one million (Rs 8.5 million).

Leader of Nepal Trade Union Congress-Independent Laxman Basnet said that Japan should share its best trade union practices with Nepali trade union leaders and industrialists to minimise disputes. “We can learn a lot from Japan,” he said.

According to the Labour Force Survey 2008, about 11.7 million Nepalis are physically active and more than 400,000 Nepalis enter the labour market every year. But the formal sector of the country has not been able to provide jobs to them, therefore foreign employment and the informal sector are the only options for the workforce.

Every year about 350,000 Nepali youths opt for foreign jobs and the remaining join the informal sector. There are hardly 50,000 people who get jobs in the formal sector in the country. It is believed there are about six million workers in the informal sector including 2.2 million home-based workers.

“There is no other option in the country, so the informal sector is growing,” said joint secretary of the ministry Purushottam Poudel presenting his paper on informal economy. The growing informal sector could be a great risk to the country when post-conflict management is very weak. Therefore, the government is taking the issue seriously, he added.

Japanese ambassador to Nepal Kunio Takahashi assured continued support to manage the informal sector and reduce industrial disputes. He urged trade union leaders and employers to adopt Japanese model of dispute resolution to build a better investment friendly environment. Managing workers is a must for it, he added.

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