Distinguish between formal and informal sectors of the economy

Formal sector in India

  • In this sector all jobs with specific working hours and regular wages and the worker’s job is assured
  • It is a licensed organization and is liable to pay taxes.
  • Banks and other corporations comes under formal sectors
  • Rag pickers, moneylenders, brokers are considered as a part of an informal economy.
  • It is also described as the grey economy.

Informal sector in India

  • Majority of the population is into the informal sectors.
  • Informal sectors are deemed low with low production value.
  • In India agriculture, dairy, horticulture and related occupation employ 52 percent of the workers.
  • It lacks security both legally and economically
  • About 25 percent of the informal sectors constitute urban employment in India

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