After Independence, India chose planned development. Planners hoped that, as national output grew, more people would find a decent livelihood, and that more and more workers would move into the formal sector. To judge how far these hopes came true, economists study two developmental indicators over the years of planning: the growth of Gross Domestic Product (GDP) and the growth of employment. They also look at the industries in which people work and at the status with which they work.
Planners hoped more workers would join the formal sector. How are formal sector workers better placed than informal sector workers?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Both (1) and (2)
Formal sector workers are better placed in two ways: they get social security benefits, and they earn more than informal sector workers.
Option (1) They enjoy social security benefits — Correct statement, but it is only one of the correct points, so on its own it is not the answer. Formal workers get benefits such as provident fund and pension.
Option (2) They earn more than those in the informal sector — Correct statement, but it is only one of the correct points, so on its own it is not the answer. Their pay is higher.
Option (3) They decide how, where and when they work — Incorrect. This fits someone who runs his own enterprise. A formal sector worker is employed by an establishment.
NCERT (2026-27): “6.7 Informalisation of Indian Workforce … Those who are working in the formal sector enjoy social security benefits. They earn more than those in the informal sector. …” |