The five year new plan would be the major document after Medium Term Development Framework (MTDF 2005-2010). The main objective of the MTDF was to bring about a paradigm shift in the socio-economic milieu that inspires and motivates the best out of the people of Pakistan and effectively utilise the huge resources.

While the mid term review of the MTDF conducted recently, expressed concern over the missing of various targets during the first three years of the programme, the officials of the Planning Commission thought it fit to go for 2010-2015 plan reportedly at the behest of the Deputy Chairman Planning Commission Salman Faruqi. The officials of the Planning Commission are analysing the working paper prepared by Dr Sabur Ghayur that seeks to eliminate informal sector.  Dr Sabur, who is chairman Policy Planning Cell of the ministry of labour and manpower said that his paper was first sent to all the key  ministries and called for implementing recommendations.

Dr Sabur, said: "There was consensus in the economic ministries that parallel black economy of $83 billion could yield the national exchequer $8 billion if taxed even at the minimum rate of 10 per cent. Pakistani economy is largely undocumented, it provides space to informal sector to grow and thrive. Under-invoicing has gone on for years and at a huge scale."

Responding to a question, Dr Sabur said that black economy cannot be eliminated through punitive measures and that it needed to be tackled by providing  incentives that would gradually merge the black economy into the formal economy.

Answering a question, he said that certain strategy would have to be finalised and adopted to bring the informal sector into formal for achieving new resource mobilisation particularly by encouraging the development of cottage industry across the country. He said he was happy to receive a good feed back from the key ministries about the informal economy aimed at giving an implementation mechanism to substantially raise revenues by providing more incentives to the informal sector to merge into the formal sector.

Dr Sabur, further said that the informal sector consisted of small units producing goods and services with the primary objective of generating employment and incomes to families engaged in these activities. This sector has been characterised by low levels of capital, skills, access to organised markets and technology, low and unstable incomes and poor and unpredictable working conditions.

Such activities are often outside the scope and purview of the official statistical enumeration and government regulations as well as beyond formal system of social protection. The units operating in the informal sector are highly labour intensive but employment is mostly causal; based on kinship, personal or social relations rather than contractual agreements ensuring protection. The informal sector activities depend, to large extent, on the local and regional demand.

This informal sector is difficult to estimate due to non-recording to activities falling in this sector. The informal sector is expanding more rapidly in urban areas as compared to rural areas. It included wholesale and retail trade (35 percent), ranked as number one in generating informal sector employment followed by manufacturing (21 per cent), community, social and personnel services (17.7 per cent), construction (13.8 per cent) and transport (11.1 per cent). Despite the growing size, he pointed out that the informal sector continues to be largely 'invisible' and 'neglected'. The informal sector plays a significant role in employment and income generation in Pakistan but is marked with extreme inadequacy of detailed and reliable data. The government has been proposed to work out a comprehensive system of statistics on the informal sector activities, Dr Sabur said.