Economics (NCERT) Notes → Class XI

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• Technology used in the informal sector enterprises is outdated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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