Organised and Unorganised Sector

Organised Sector: The organised sector covers those enterprises or places of work where the terms of employment are regular and people have assured work. It is called organised because it has some formal processes and procedures.

These enterprises are registered by the government and have to follow the rules and regulations framed by government under various laws like Factories Act, Minimum Wages Act, Payment of Gratuity Act, Employees' Provident Funds and Miscellaneous Provisions Act, Shops and Establishment Act etc.

Thus, workers in the organised sector have security of employment, work for a fixed number of hours and additional overtime wages if asked to work more. They get medical benefits and the management has to ensure facilities like clean drinking water and a safe working environment.

Some of these people may not be employed by anyone, but may work on their own but they too have to register themselves with the government and follow the rules and regulations. In some organisations, the workmen also get pension after retirement. They also get paid leave, payment for working on holidays and medical benefits.

Unorganised Sector: In contrast, the unorganised sector enterprises are not registered with the government. This sector characterised by small and scattered units which are largely outside the control of government and governmental rules and regulations are not followed. Workers get lower wages and there is no provision for overtime payment, paid holidays or paid leave due to sickness etc.

A large number of people doing jobs like street hawkers, repair workmen, domestic servants and similar other workmen come under unorganised sector in urban areas. In rural areas, unorganised sector comprises landless agricultural labourers, small and marginal farmers, share croppers and artisans (weavers, blacksmiths, carpenters,goldsmiths etc). Workmen can be asked to quit the job at any time without any reason being given and thus, employment is insecure. Casual workers and landless labourers in rural areas also fall in this category.

Protection of Workers in Unorganised Sector: The unorganised sector comprises mainly of workers who get irregular and low paid work, besides facing social discrimination. Their protection and supporting them is necessary for both economic and social equality.

Protection of unorganised sector workers can be accomplished through the following ways:-

We should develop alternative sources of employment besides agriculture. For this purpose, other sections of the economy like power, finance, skill development and other infrastructure need to be developed.

Public works programme like construction of roads and school buildings, digging of irrigation canals and other similar work should be implemented in rural areas with a view to provide employment to rural workers throughout the year. However, these are short-term measures only.

Since the workers in the unorganised sector have no social security or job security, sincere efforts are required to provide them social, financial and required economical security. The government must provide them compulsory insurance either on marginal contribution or on a nominal contribution.

Sample Questions

(More Questions for each concept available in Login)

Question : 1

In Urban areas, unorganised sector comprises mainly of _________________
A. Workers engaged in small scale industry		B. Casual workers in construction, trade and transport
C. Head load workers		D. All of the above
Right Option : D
View Explanation

Question : 2

In the rural areas, the unorganised sector mostly comprises of :
A. Landless agricultural labourers		B. Small and marginal farmers
C. Artisans		D. All of the above
Right Option : D
View Explanation

Question : 3

In India, large population is employed in :
A. Organised sector	B. Unorganised sector	C. Semi-organised sector	D. None of the above
Right Option : B
View Explanation