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Difference between Organized and Unorganized Sectors

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India is one of the world’s fastest-growing economies, and it is expected to overtake China as the world’s second-largest economy by 2050. A number of things influence the economy. The nominal GDP is expected to reach USD 3.202 trillion in 2020. The primary, secondary, and tertiary sectors of the Indian economy, respectively, are the primary, secondary, and tertiary sectors.


Organized and Unorganized Sectors

Organized and Unorganized Sector

The meaning and characteristics of organized and unorganized sectors are as follows:

Organized Sector

Employees who work for the government, such as state-owned corporations and private businesses, are included in the organized sector. Employees have safe work in the organized sector because job terms and conditions are generally based on acts and tenets established and arranged by the government, such as the Tiny Amount Wages Act, Payment of Gratuity Act, and so on.

Benefits of working in organized sectors

The benefits of working in organized sectors are as follows:

  1. Employees have the privilege of employment protection.
  2. They get paid more for overtime if they work longer hours.
  3. Workers are entitled to paid vacations, provident funds, and medical assistance, among other benefits.
  4. Employees are provided with basic health and hygiene benefits, such as free medical examination and clean drinking water.
  5. They are subject to stringent service requirements and cannot be fired on the spot without prior warning.
  6. The prerequisite for proper candidate registration as well as the passage of exams makes entry into the organized sector extremely difficult.

Unorganized Sectors

The government’s employment standards and regulations are regularly violated in the unorganized sector. A private corporation, for example, is owned by one or more individuals. In the Indian economy, the existence of a huge number of informal or unorganized labor services is well-known. The Ministry of Work of the Government of India has classified the unorganized labor force into four groups: profession, service character, especially distressed group, and repair group.

Difference between Organized and Unorganized Sectors

Organized SectorUnorganized Sector
Employees are promised work, and workers are subject to government records and restrictions.There are small firms or organizations that do not follow the government’s employment standards.
The employment is routine and operates 24 hours a day, seven days a week. People are paid more if they work longer hours.Work is frequently underpaid and overworked.
Employees receive medical benefits as well as a variety of other benefits.The workers do not receive any further compensation.
The government keeps track of businesses and requires them to follow certain laws and regulations.The government does not have power over organizations. They also develop laws and regulations, although they are not strictly enforced.
Salaries, promotions, and increments are all carefully followed.They aren’t being followed correctly.
It is a stable position.Jobs are rarely guaranteed.

Frequently Asked Questions

Q 1. What is the difference between organization and unorganized?


The organized sector mostly consists of formally registered businesses, which adhere to labor laws, offers amount of job security, and also other forms of social benefits. The unorganized sector comprises informal businesses with no regulations, no job security, and other forms of benefits.

Q 2. What is an example of an organized and unorganized sector?


Examples of the organized sector would include government staff, salaried employees, etc. For unorganized sector includes domestic workers, shop keepers, etc.

Q 3. Is the bank an organized sector?


The organized sector consists of banks which include the Reserve Bank of India, Commercial Banks and also Cooperative Banks, etc.

Last Updated : 16 Aug, 2023
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