A town has 60,000 workers. Of them, 9,000 work in public sector establishments, 6,000 in private establishments with 10 or more hired workers, 15,000 in private enterprises with fewer than 10 hired workers, and 30,000 are self-employed persons with no hired worker. What percentage of the town’s workers are in the formal sector?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 25 per cent
Formal sector workers are those in all public sector establishments and in private establishments with 10 or more hired workers. Everyone else is informal.
Given:
All workers = 60,000
Public sector establishments = 9,000
Private establishments with 10 or more hired workers = 6,000
\( \text{Formal workers} = 9{,}000 + 6{,}000 = 15{,}000 \)
\( \displaystyle \text{Share} = \frac{15{,}000}{60{,}000} \times 100 = 25 \text{ per cent} \)
Option (1) 15 per cent — Incorrect. It counts only the public sector. Private units with 10 or more hired workers are formal too.
Option (3) 50 per cent — Incorrect. It adds the 15,000 in small private enterprises. With fewer than 10 hired workers, they are informal.
Option (4) 75 per cent — Incorrect. This is the share of the informal sector (45,000 of 60,000).
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. Thus, informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed who do not have any hired workers. …” |