The characteristic features of a 'Formal sector' are :
(A) It employs ten or more people throughout the year
(B) The employees get medical benefits
(C) The employees are not ensured safe working conditions
(D) The organisation has fixed working hours
(E) The employee gets salary raise if the employer likes you
Choose the correct answer from the options given below :
(1) (A), (B), (D) only
(2) (B), (C), (E) only
(3) (C), (D), (E) only
(4) (B), (C), (D) only
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (B), (D) only
(A) It employs ten or more people throughout the year Correct. According to one definition, the organised or formal sector consists of all units employing ten or more people throughout the year.
(B) The employees get medical benefits Correct. Such units have to be registered with the government so that their employees get proper salaries or wages, pension and other benefits, medical benefits among them.
(C) The employees are not ensured safe working conditions Incorrect. This describes the informal sector. Its workers seldom belong to unions and have no experience of fighting for safe working conditions; they are left to the whims and fancies of the employer. In the formal sector, registration and unions protect the workers.
(D) The organisation has fixed working hours Correct. A registered unit works under the rules that bind it: set hours of work, set wages and benefits. In the informal sector the hours depend on the employer or contractor.
(E) The employee gets salary raise if the employer likes you Incorrect. In the formal sector pay and increments follow fixed rules. A raise that depends on the employer’s liking is the mark of the informal sector, where workers are left to the whims and fancies of the employer.
NCERT (2025-26): “The Specificity of Indian Industrialisation … Economists and others often make a distinction between the organised or formal and unorganised or informal sector. There is a debate over how to define these sectors. According to one definition, the organised sector consists of all units employing ten or more people throughout the year. These have to be registered with the government to ensure that their employees get proper salaries or wages, pension and other benefits. In India, over 90% of the work, whether it is in agriculture, industry or services is in the unorganised or informal sector.…” “…Third, since very few people are members of unions, a feature of the organised sector, the unorganised or informal sector workers do not have the experience of collectively fighting for proper wages and safe working conditions. The government has laws to monitor conditions in the unorganised sector, but in practice they are left to the whims and fancies of the employer or contractor.” |