Login

what is the difference between formal and informal sectors??

In formal sector a worker recieves following benefits:-

1) he gets paid holidays/leave
2) he is compensated at his dismissal from the current job untill he gets another job
3) he enjoys high bargaining power
4)he recieves pensions

Above benefits could not be availed by a worker working in informal sector
  • 3
View Full Answer
The formal sector consists of the businesses, enterprises and economic activities that are monitored, protected and taxed by the government, whereas the informal sector is comprised of the workers and enterprises that are not under government regulation.
  • 8
yyb
  • -11

In a formal economy, a worker:

•    has a formal contract with the employer
•    has pre-defined work conditions and job responsibilities
•    gets an assured and decent fixed salary with perks and incentives
•    Has fixed duration of work time
•    is part of an organized group of people working in the same environment and is legally and socially aware about its rights
•    is covered by a social security for health and life risks

In an informal economy, worker has:

•    has no formal contract with his employer
•    has no systematic work conditions
•    gets irregularly and unevenly paid.
•    has no forum to express his grievances
•    has no fixed hours of work and mostly earns hand to mouth
•    is not covered by any kind of social security system and has poor knowledge about the need to protect himself socially and economically

  • 9
Unlike formal sectors, informal sectors are deemed low with low production value. In India, agriculture, diary, horticulture and related ocuppation employ 52 percent of the workers. It has less remunerative unlike the formal sectors. The latter provides incentives such as bonuses, paid leave and fixed working hours not to forget maternity leave which is devoid in informal sectors.
  • 1
Unlike formal sectors, informal sectors are deemed low with low production value. In India, agriculture, diary, horticulture and related ocuppation employ 52 percent of the workers. It has less remunerative unlike the formal sectors. The latter provides incentives such as bonuses, paid leave and fixed working hours not to forget maternity leave which is devoid in informal sectors.
  • -1
What are you looking for?