1. Informal Sector Statistics
Nepal
Informal Sector Statistics
Informal Sector Statistics Training
Bangkok, Thailand | November 2017

2. Outline of presentation
Definition of informal sector
Status of the informal sector in your country
Country policies for informal sector
Current statistics being produced
What data sources do you collect?
National Accounts and the informal sector
Country specific issues in statistics
Development plans
How development partners can help

3. Definitions of informal sector
Policy perspective
Not officially defined
Mainstreaming of informal sector in formal sector
(mentioned in the Current 14th three years’ periodic plan and annual budget speech)
Promulgated the new Labor Act 2017.
(The act has changed the definition of establishment but not explicitly defined the informal sector)

4. Definitions of informal sector (contd.)
Statistical definition
CBS adopt the definition of informal sector as per the ILO guideline
Employment in the informal sector
(Nepal LFS 1998 & 2008 – 15th ICLS, LFS 2017 on going – 19th ICLS)
Definition of informal sector limited to non-agricultural sectors only

5. Status of informal sector statistics
% of GDP: Not yet declared officially
% of labour force (2008, LFS) currently employed in
- agriculture sector :
- non-agricultural formal sector :
- non-agricultural informal sector :
SDG 8 & 10 – indicator status: Not yet published

6. Informal sector country policies
14th three years’ periodic plan (2016/ /19)
Registration of informal sector labor and their accidental insurance
Intended to expand the social insurance and micro finance in the informal sector as well
Implement effective legal provisions in controlling the non- observed activities
(like black market, monopoly market, informal business activities)

7. Informal sector country policies (contd.)
Budget Speech
Mainstreaming informal economic activities in formal sector to capture large volume of economy that is out of formal sector

8. Informal sector country policies (contd.)
National Employment Policy 2014
Developed by Ministry of Labor and Employment
The policy has aimed transforming the informal employment to the formal employment to improve the quality of employment in the country
A nine-point policies has been stated like providing appropriate professional or entrepreneurship trainings, ensuring the social security of informal employment to achieve this objective

9. Data sources Does NOT EXIST Informal Sector focused survey
Data on informal sector has been supplied from various sources:
Labor Force Survey (1998, 2008, 2017 on going)
(two stage cluster sampling design, supposed to conduct in every 5 years)

10. Data sources (contd.)
Living Standards Measurement Survey (1995, 2003, 2011, planned)
(two stage cluster sample design, supposed to conduct in every 5 years)
Population Census (every 10 years, next round 2021)
Planned - Economic Census in 2018

11. How is the informal sector included in the national accounts of Nepal
Main data source: LSMS LFS Annual Household Survey Population Census Agriculture Census Census of Manufacturing Establishment MPPI & Administrative data of concern ministries/departments.

12. How is the informal sector included in the national accounts of Nepal
Determining the informal activity:
Volume extrapolation, Household growth rate
MPPI, Commodity Flow Approach (Trade)
Registration Status
Hired Status
Yes No
Formal
Informal

13. Issues Issues need to resolve
Weak research practices on informal sector
Measurement of national account is still imperfect due to the absence of
structural data on informal sector such as input, output, intermediate consumption, capital formation etc.
non-existence of an updated SBR, EC and regular household survey focusing on informal sector

14. Issues (contd.) Policy issues
Adopt international concept, definition and classification on informal sector of economy in national legislations and policies
Define accountability of data suppliers in the relevant policies
Develop Statistical Business Register

15. Issues (contd.) SDG indicators for goal 8
(Informal employment, Av. hourly earnings)
No regular survey except LSMS, LFS
Disaggregated data demands for larger sample size
SDG indicators for goal 10
(Labor share of GDP)
Data not available

16. Development plans for NSO
Plans to develop and enhance informal sector statistics
Establish network of experts for measuring informal economies
Develop the standard concept, definition and methodologies on informal sector statistics
Identify constraints and prepare strategies for developing informal sector statistics

17. Development plans for NSO (contd.)
Plans to develop and enhance informal sector statistics (contd.)
Develop technical capacity on informal sector statistics and in preparing informal accounts
Conduct economic census regularly and establish SBR

18. Development partners How development partners can help
Technical Assistance
Assist in policy development on informal sector statistics for the country
Develop the standard concept, definition and methodologies on informal statistics
Identify the possible regular data sources
Develop technical capacity on informal sector statistics through training, workshop, seminar

19. Development partners (contd.)
How development partners can help
Financial Assistance
Support to conduct specific informal sector surveys

20. Q&A