Islamabad, September 2:

Pakistan’s informal sector has grown by 20 per cent, prompting alarm bells in the government that views it as a means for businessmen to evade taxes.

“The issue has become a matter of great concern, with the government considering a proposal to bring the informal sector in the mainstream through its ‘decent work country programme’,” Dawn reported today.

“According to a conservative estimate, out of the $160 billion size of country’s economy, $32 billion plus is in the informal sector, providing a huge opportunity to its businessmen to evade taxes every year,” it reported.

Agriculture and related activities, including fishing, engage 48.4 per cent of the Pakistani workforce of some 40 million. Of the remaining, 72.9 per cent is employed in the informal sector.

The informal sector consists of small units producing goods or services and its activities are characterised by low levels of capital, skills, and access to organised markets and technologies; low and unstable incomes; and poor and unpredictable working conditions.

This sector is often outside the scope and purview of the official statistical machinery and government regulations, also the formal system of social protection. The units operating in the informal sector are highly labour intensive but employment is mostly casual.