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How are the activities in the economy classified on the basis of employment conditions?

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  • Last Updated : 03 Nov, 2022
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Economic activities are human endeavors that produce income. Primary, secondary, and tertiary economic activity are typically categorized into these three categories. Higher services are divided into quaternary and quinary activities within tertiary activities.

Activities classified Based on Employment Conditions

The economic activities are divided into organized and unorganized sectors based on employment conditions.

Organized Sector

This industry includes businesses that have been registered with the government and must obey its laws, such as the Factory Act, Minimum Wage Act, Shops and Establishment Act, Payment of Gratuity Act, etc. The organized sector provides benefits for employees and job security. 

They only need to work a specific number of hours. The employer is required to pay overtime if they put in more hours. They are entitled to paid time off, holiday pay, a provident fund, gratuities, etc. Examples: GAIL, Reliance Industries Ltd., etc.

Several legislation applies to businesses, hospitals, and schools run by the organized sector. Joining the organized sector is fairly challenging because proper organization registration is required. The government controls and levies taxes on the industry. Government employees, banks, registered industrial workers, government schools, and colleges are examples of organized sectors.

Unorganized Sector

This includes the small, scattered units that operate mostly independently of the government. Rules and regulations are present, yet they are never upheld in this place. Low pay and a lack of job security are characteristics of the unorganized industry. Example: temporary employees in retail, construction, farming, etc. 

There is little job security in this industry, and the working conditions are extremely difficult. There are no provisions for paid time off, holidays, sick leave, or overtime. It’s possible to ask someone to leave without giving them a warning or a cause.

Difference between Organized and Unorganized Sectors

 

Organized Sector

Unorganized Sector

1.  Employment is regular in this sector. Employment is irregular in this sector.
2.  This sector follows the rules and regulations of the government. This sector doesn’t follow the rules and regulations of the government.
3.  This sector’s employees have job security. This sector’s employees don’t have job security.
4.  This sector includes additional benefits to their employees like medical facilities. This sector doesn’t include any additional benefits to their employees.
5.  Employees in this sector can still get paid in holidays or leaves. Employees in this sector didn’t get any payment for holidays and leaves.
6.  They are registered by the government. They are not registered by the government.

FAQs on Employment Conditions

Question 1: Define employee and employer.

Answer:

  • Employer: A person who hires people.
  • Employee: A person who is compensated for rendering the services.

Question 2: What are economic activity and its three main sectors?

Answer:

Economic activities are human endeavors that produce income. Primary, secondary, and tertiary economic activity are typically categorized into these three categories.

Question 3: Write an example of organized and unorganized sectors.

Answer:

GAIL and Reliance Industries Ltd are an example of organized sectors. temporary employees in retail, construction, etc are an example of unorganized sectors.

Question 4: Write about the organized sector.

Answer:

This industry includes businesses that have been registered with the government and must obey its laws, such as the Factory Act, Minimum Wage Act, Shops and Establishment Act, Payment of Gratuity Act, etc. The organized sector provides benefits for employees and job security. They only need to work a specific number of hours. 

The employer is required to pay overtime if they put in more hours. They are entitled to paid time off, holiday pay, a provident fund, gratuities, etc. Examples: GAIL, Reliance Industries Ltd., etc.

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