Synopsis In Indian economy both formal and informal sectors play a key role in employment generation. The informal sector in the country is very large and a basic source of self employment and small business which includes agriculture and allied activities, small and medium sized enterprises, manufacturing, trade, communications etc. In the present study an attempt has been made to analyze the role of urban informal sector in employment generation. It has further attempted to make a study of the structure of informal sector activities relating to enterprises and entrepreneurs. The socio-economic characteristics of the informal sector employees have also been studied. This study has also elaborately discussed the various incentives and policy measures introduced by the government to development to develop this sector of employment generation.