Economics (NCERT) Notes

7.4 Formal and Informal Sector

Benefits of the Employees in Formal Sectors


• Better job security


• Social security benefits


• Better salaries


 


Issues with Informal Sectors


• Workers and enterprises in the informal sector do not get regular income.


• They do not have any protection or regulation from the government.


• Workers are dismissed without any compensation.


• Technology used in the informal sector enterprises is outdated


• They also do not maintain any accounts.


• Workers of this sector often live in slums and are squatters (unlawful tenants).


 


Government Initiatives


• Indian government has initiated the modernisation of informal sector enterprises.


• International Labour Organisation (ILO) is playing important role in modernization.


• Government is taking many steps for the provision of social security measures to informal sector workers.


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