In 2019-20, India had about 535 million workers, of whom about 59 million were in the formal sector. Which conclusion follows?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → About 11 per cent of workers were in the public sector or in private units with 10 or more hired workers
The formal sector is the public sector plus private units with 10 or more hired workers. Its share of workers is found like this:
Share of formal workers = 59 ÷ 535 × 100
= about 11 per cent
So the remaining 89 per cent are in the informal sector.
Option (1) About 89 per cent of workers were in the public sector or in private units with 10 or more hired workers — Incorrect. 89 per cent is the informal share.
Option (2) About 11 per cent of workers were in the public sector or in private units with 10 or more hired workers — Correct. 59 of 535 million is about 11 per cent, and these are the formal sector units.
Option (3) About 11 per cent of workers were in the informal sector, mostly in farming — Incorrect. The informal share is 89 per cent, not 11.
Option (4) About 89 per cent of workers enjoyed social security benefits through labour laws — Incorrect. Social security benefits go to formal workers, only about 11 per cent.
NCERT (2026-27): “6.7 Informalisation of Indian Workforce … 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. …” “… Those who are working in the formal sector enjoy social security benefits. They earn more than those in the informal sector. Developmental planning envisaged that as the economy grows, more and more workers would become formal sector workers and the proportion of workers engaged in the informal sector would dwindle. … Look at the following chart which gives the distribution of workforce in formal and informal sectors. In 2019–2020 there were about 535 million workers in India. There were about 59 million workers in the formal sector (Chart 6.4). … About only 11 per cent (59/535×100)! Thus, the rest 89 per cent are in the informal sector. …” |