Question

How are the activities in the economy classified on the basis of employment conditions?

Answer 1

On the basis of employment conditions, the activities in the economy can be classified as Organised and unorganized sector

Unorganised Sector – Poor Working Conditions

• In the unorganised sector, it is very common to find many organised sector enterprises.
• Although regulations and rules do exist, they are not followed.
• The laws to protect the labourers are not followed and strategies are used to evade taxes by such enterprises.
• The earnings of the workers are not regular.
• The salary of the workers is very low.
• Workers are not given a fair wage and they are exploited to work more.
• These jobs do not give any extra benefits to the workers.
• Jobs of the workers are not secure.
• The most sought after jobs for people are in the organised sector, yet people join the unorganised sector.
• Low earnings did not deter people from joining the unorganized sector since they did not have any viable alternatives.
• In addition, the expansion of employment opportunities in the organised sector was very slow.

Employment Conditions in Organised Sector

• Organised sector covers those enterprises in which people have assured work, and the terms of employment are regular.
• They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Shops and Establishments Act, Payment of Gratuity Act, Minimum Wages Act, Factories Act etc.
• It is called organised because there are some formal procedures and processes that need to be followed.
• Some of these people may work on their own and may not be employed by anyone yet they have to register themselves with the government and follow the given regulations and rules.
• Security of employment is given to the workers in the organised sector.
• If workers are made to work more, they have to be paid overtime by the employer. Usually employees are only expected to work for a fixed number of hours.
• Employees are provided with several other benefits by the employers.
• Employees in the organised sector will be given gratuity, provident fund, payment during holidays, paid leaves etc.
• In the organised sector, as per law, the employees must be provided with a safe working environment, drinking water facilities should be ensured by factory managers, and workers should be given medical benefits.
• Pensions will be provided to workers when they retire.