Organised and unorganised sectors in India

Meaning of organised and unorganised sectors.

In the Organised sector, businesses have appropriate authority, are governed by various Acts and stricktly follow the relevant rules and regulations. Workers get monthly salaries and other benefits.

Unorganised sector comprises of small scale enterprises that are not registered with the government and are not governed by any Acts. Rrules and regulaltions usually don’t apply to this sector. Most workers earn daily wages with hardly any other benefits.

Contribution of these sectors to the Indian economy?

Activities of the organised sector are included in the gross national product (GNP) and gross domestic product (GDP) of the country. The sector is taxed by the government, allowing the government to spend on welfare schemes, infrastructure and defence. The Organised sector provides a better view of the overall health of the economy. This sector offers fixed employment to people; growth in this sector boosts employment and has a positive impact on the overall sentiments.

Unorganised sector plays a significant role in the economy by creating in terms of employment opportunities and helping reduce poverty. The informal economy in India is much larger than most people realize, with women playing an important role. The informal sector contributes a sizeable portion to India’s net domestic product, savings and capital formation.

Problems faced by unorganised sectors of India

Problems faced by the unorganised sectors of India:

• Insufficient labour laws promotes exploitation and harassment, most workers are reluctant to complain for fear of loss of work
• No social security or guaranteed minimum wages. Even a short break from work, due to illness or any other reason, is devastating for their families.
• Low literacy and high instances of child labour

Is the unorganised sector a boon or a bane to the Indian economy?

While the formal sector offers better quality of life, the sector has been unable to create sufficient jobs. India’s informal sector, on the other hand, is seen as the backbone of the economy as it employs over 70% of the workforce in India. The government is aware of the importance of this sector and is taking several measures to improve the lives of informally employed people, by introducing welfare schemes, improving infrastructure ad skilling them.

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