Question

Explain how does formal & Informal sectors functions

& which is better one.

Answer 1

Answer:

In India a major section of the Indian population is into the informal sectors, it lacks security both legally and economically. So from my point of view formal sector is better.

Explanation:

the formal or organized sector and the informal or unorganized sector constitutes the Indian economy.

Formal sectors represent all jobs with specific working hours and regular wages and the worker’s job is assured. The workers are employed by the government, state or private sector enterprises. It is a licensed organization and is liable to pay taxes. It includes large-scale operations such as banks and other corporations.

Informal or unorganized sectors are the ones where the employees or the workers do not have regular working hours and wages and are exempted from taxes. It is mainly concerned with the primary production of goods and services with the primary aim of generating employment and income on a small scale. A street vendor selling his farm products on the street to generate and earn his daily bread is an example of an informal economy.