Mohan has worked for eight years as an accountant in a private firm. The firm employs six hired workers, including him, and pays Mohan his salary every month. How is Mohan classified?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A regular salaried employee in the informal sector, as his firm has fewer than 10 hired workers
Mohan is a regular salaried employee, as the firm engages him and pays him on a regular basis. But his firm is a private enterprise with fewer than 10 hired workers, so it belongs to the informal sector.
Status and sector are two different ways of classifying a worker. Status depends on how a worker is engaged and paid. Sector depends on the kind and size of the establishment. So a regular salaried worker can also be an informal sector worker.
Option (1) A regular salaried employee in the formal sector, as he gets a salary every month — Incorrect. A monthly salary makes him regular salaried, but only public sector establishments and private ones with 10 or more hired workers are in the formal sector.
Option (2) A self-employed worker in the informal sector, as he works in a small private firm — Incorrect. A self-employed worker owns and operates an enterprise. Mohan works for the firm and is paid by it.
Option (3) A casual wage labourer in the informal sector, as his firm has fewer than 10 hired workers — Incorrect. Casual wage labourers are casually engaged in others’ work and paid for the work done, like construction workers. Mohan has a regular job and a regular salary.
Option (4) A regular salaried employee in the informal sector, as his firm has fewer than 10 hired workers — Correct. His status is regular salaried and his firm is an informal sector enterprise.
NCERT (2026-27): “6.7 Informalisation of Indian Workforce … To know this we classify workforce into two categories: workers in formal and informal sectors, which are also referred to as organised and unorganised sectors. All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments and those who work in such establishments are formal sector workers. All other enterprises and workers working in those enterprises form the informal sector. …” Glossary: “Regular Salaried/Wage Employee – Persons who work in others’ farm or non-farm enterprises and, in return, receive salary or wages on a regular basis (i.e. not on the basis of daily or periodic renewal of work contract). They include not only persons getting time wage but also persons receiving piece wage or salary and paid apprentices, both full time and part-time.” Glossary: “Informal Sector Enterprises – Those private sector enterprises, which employ less than 10 workers on a regular basis.” |