An empirical assessment of drivers of the informal micro and small enterprises: evidence from the city of Noida, India

This research paper intends to understand the informality level of informal enterprises and the reason for operating informally. Research was conducted in an industrial location of Noida, India that provides self-employment opportunities. Sampling technique used was stratified random sampling with sample size of 125 informal enterprises. The study was conducted through a structured questionnaire. The data was collected with the help of in-depth interview. The study tried to identify the factors that contribute to inception of informal business activities. The research also includes the challenges in running such enterprise. The research findings depict that majority of informal enterprises did not have access to credit through formal sources. This research concludes that informal enterprises do not have any expansion plan to grow and face major challenges relating to infrastructure and government regulations. The major reasons for informalisation were the lack of knowledge of registration, avoidance of taxes, and shortage of formal employment opportunities. This research work is original and has not been published anywhere else.