Manoj Kumar Agarwal, Associate Professor, Department of Economics, University of Lucknow, Uttar Pradesh
Ram Chandra Dhakal, Reader, Department of Economics, Birendra Multiple Campus, Tribhuwan University, Chitwan, Nepal

In the landlocked, hilly and backward Himalayan kingdom of Nepal, the informal sector plays a very important role in taking care of the poor and marginalised in the absence of any alternative for employment in the formal sector. The study is based upon the primary data collected from rural and urban locations of the Chitwan district of Nepal. It is found that informal sector activities are highly heterogeneous in terms of their nature, scale, modernization, and investments, among other things. Characterised by low investments, the employment of mainly family labour, and low skill and training, the informal sector has been helpful in raising the level of income of the stakeholders. Literacy levels and household property have been found to be important determinants of income in this sector wherein women are found to be more efficient and articulate as they have been using limited resources more efficiently and have been successful in mobilising greater support from the family workforce. Households with women as the main workers in the informal sector show better demographic features with lower unemployment. With greater State support, the conditions of the informal sector may improve and help in mitigating poverty and unemployment problems considerably.