Question
Differentiate between formal sector and informal sector.
| S.No. |
Formal Sector
|
Informal Sector
|
| 1. |
All public and private sector establishments which employ 10 or more hired workers comprise the formal sector.
|
All establishments which employ less than 10 workers comprise the informal sector.
|
| 2. |
Government exercises control over this sector by passing necessary acts and formulating rules and regulations.
|
Government has no control over this sector. Except for the Minimum Wages Act, no other act is applicable on this sector.
|
| 3. |
Workers working in this sector are entitled to social security benefits.
|
Workers working in this sector are not entitled to social security benefits.
|
| 4. |
The workers working in formal sector have a right to form trade unions.
|
The workers working in informal sector do not enjoy any such right.
|
| 5. |
Formal sector offers better pay scales to its workers.
|
The pay scales in the informal sector are comparatively low.
|
| 6. |
Workers working in formal sector enjoy job security. They cannot be dismissed without giving them a due notice and/ or compensation.
|
Workers working in informal sector does not enjoy job security. They can be dismissed without a notice and no compensation is offered to them.
|
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