Informal Sector and Economic Growth in Bangladesh

In terms of GDP and employment, Bangladesh’s informal sectors are the most important economic activities. According to studies, about 35% to 88% of Bangladesh’s workforce is employed in the informal economy, and the informal economy contributes around 49% to 64% of the country’s GDP. The agricultural sector is Bangladesh’s largest informal sector. In addition, the informal sector includes a considerable number of small & medium companies (SMEs) & micro firms. The key motives behind the great informal area are official dom and corruption, excellence of the allowed framework and the bigger size of excise and social influence burden. Though this sector might support the economic progress in the short run, but in conclusion, it hinders the route of development owed to less output. This sector would be curbed dejected by improving info transmission, reducing extreme tax, macroeconomic steadiness, improving regulatory agenda etc. for healthier economic development. In developing countries like Bangladesh, this urban population growth is particularly common, leading to a job boom in the informal sector. Another major concern of informal employment is the lack of skills compared to formal employment. All government initiatives, economic development and a better regulatory framework will help improve this industry.