Which of the following workers belong to the formal sector?
(A) A peon in a small government office that has only three staff
(B) A salesman in a private shop that has nine hired workers
(C) A conductor in a private bus company with 20 hired workers
(D) An accountant in a private firm which has exactly 10 hired workers
(E) A tailor who runs his own shop with no hired worker
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C) and (D) only
Every public sector establishment is formal, whatever its size. A private one is formal only with 10 or more hired workers.
(A) A peon in a small government office that has only three staff — Correct. A government office is a public establishment, so it is formal even with three staff.
(B) A salesman in a private shop that has nine hired workers — Incorrect. Nine is below 10, so the shop is informal.
(C) A conductor in a private bus company with 20 hired workers — Correct. 20 hired workers is above the limit.
(D) An accountant in a private firm which has exactly 10 hired workers — Correct. The rule says 10 or more, so exactly 10 counts.
(E) A tailor who runs his own shop with no hired worker — Incorrect. The self-employed with no hired worker are in the informal sector.
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. 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. …” |