The government has undertaken several initiatives aimed at integrating the informal sector into the formal economy, with the goal of improving the productivity and resilience of the overall economy.

One key initiative is the expansion of social security coverage to include workers in the informal sector. This includes measures such as the introduction of targeted social security schemes, like pension and health insurance programs, that cater to the needs of informal workers. By providing a safety net and access to essential services, these initiatives can help improve the well-being and financial security of informal sector workers, potentially incentivizing them to join the formal economy.

Another important initiative is the simplification of business regulations and the easing of requirements for registering and operating formal enterprises. This can help lower the barriers to entry for informal businesses, making it easier for them to transition into the formal sector. Reduced bureaucratic hurdles and compliance costs can make it more attractive for informal businesses to register and operate within the formal framework.

The potential impacts of these initiatives on the overall economy include:

1. Increased productivity: By integrating the informal sector into the formal economy, businesses can gain access to resources, financing, and support services that can help improve their productivity and competitiveness. This can lead to higher output, greater efficiency, and more sustainable growth.
2. Improved resilience: Formalizing the informal sector can help strengthen the overall economic resilience by diversifying the sources of economic activity, reducing vulnerability to shocks, and increasing the tax base for the government to mobilize resources for social welfare and macroeconomic stabilization.
3. Enhanced social protection: Extending social security coverage to informal workers can help improve their living standards, reduce income insecurity, and promote more inclusive development, which can have positive spillover effects on the broader economy.
4. Increased tax revenue: As more businesses and workers transition to the formal sector, the government can expand its tax base, leading to increased tax revenue that can be used to fund public services and infrastructure development.

However, the impact of these initiatives may be constrained by various factors, such as the persistence of deep-rooted informality, the availability of suitable incentives and support mechanisms for informal businesses, the capacity of government agencies to effectively implement and monitor the initiatives, and the broader economic and political context.

Additionally, it will be crucial to ensure that the formalization process is inclusive and does not inadvertently disadvantage or marginalize certain segments of the informal sector, such as micro-enterprises or vulnerable workers. Careful design and implementation of these initiatives, coupled with ongoing monitoring and evaluation, will be necessary to maximize their positive impact on the overall economy.