Division of Sectors as Organized and Unorganized

On the basis of nature of employment, we can divide the economy into two sectors again:

Organized Sector:

  • It covers those workplaces where employment is regular and have assurance of the same.
  • They are under the jurisdiction of government and abided by laws like Factories Act, Minimum Wages Act, Shops and Establishment Act etc. It has formal process and procedure.
  • The employees need to work for a fixed number of hours. Sometimes, they are paid if they work overtime.
  • The workers also get some amenities like paid leave, payment during holidays, provident fund, tourism package, gratuity and even vehicles and houses in some professions.
  • Medical benefits, life insurance and pensions etc. are also available.

Unorganized Sector:

  • This sector exists outside the control of the government. The rules, regulations and laws are not strictly followed here. Workers are paid low wages and employment is not secure.
  • Majority of the labor force in India is employed in unorganized sector. Some of them are employed on their own doing small jobs like street vendors etc.
  • Farmers also sometimes hire laborers to work in their fields when requires.
Daily wage laborer comes under unorganized sector
Daily wage laborer comes under unorganized sector

How to Protect Workers in the Unorganized Sector?

  • Although employment in organized sector is most sough-after but the employment generation in this sector is very low.
  • A large number of workers are forced to work in unorganized sector with very low salary and no job security.
  • After the economic reforms of 1991, the unorganized sector further expanded in India and many people lost their jobs in organized sector.
  • In rural areas, the unorganized sector consists of landless agricultural laborers, small and marginal farmers, sharecroppers and artisans like blacksmith, carpenter etc. These people need to be taken care of by the government and seeds, credit, storage facilities should be provided to the small and marginal farmers.
  • In urban areas, the unorganized sector consists of workers of small factories, daily wage laborers in construction site, casual workers of trade and transport etc. and street vendors and garment makers etc.
  • It is notable that a major portion of workers of the unorganized sector are from scheduled castes, tribes and backward communities. It raises questions on their proper socioeconomic progress.
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