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    Question

    Consider the following Statements.

    (1)  All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments.

    (2)  The number of workers in the informal sector is higher than formal sector.

    (3)  Informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed who do not have any hired workers.

    Which of the above statement(s) is/are INCORRECT?

    A 1 & 2 only Correct Answer Incorrect Answer
    B 1 only Correct Answer Incorrect Answer
    C 1 & 3 Only Correct Answer Incorrect Answer
    D 1, 2, & 3 Correct Answer Incorrect Answer
    E 2 & 3 Correct Answer Incorrect Answer

    Solution

    All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments and those who work in such establishments are formal sector workers. All other enterprises and workers working in those enterprises form the informal sector. Thus, informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed who do not have any hired workers. It also includes all nonfarm casual wage labourers who work for more than one employer such as construction workers and headload workers.  

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