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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. The economy is influenced by a number of things. 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.

Primary sector

This sector’s services are fully reliant on the availability of natural resources to keep day-to-day operations running. Agriculture, mining, fishing, forestry, dairy, and other industries are examples of these industries. Agriculture, along with fisheries and forestry, contributes one-third of India’s GDP and is by far the largest contributor. The primary sector is responsible for 18.20% of GDP. India is the world’s leading producer of wheat, sugar, freshwater fish, and groundnuts, in addition to milk.

Secondary sector

The economics of the sector are based on natural resources that are utilised to create and subsequently consume the services and goods delivered. This industry transforms primary sector output into finished goods that may be sold to domestic and foreign businesses and consumers. Many of these sectors require a lot of energy, factories, and machinery, thus they’re categorised as light or heavy based on these qualities. This industry is the best when it comes to providing value to products and services. Transportation and industry are two of the most obvious examples of this.

Tertiary sector

The service sector is another name for the tertiary sector. Instead of selling finished goods, it develops services. Attention, guidance, access, experience, and emotional effort are all part of it. The tertiary sector of the industry is responsible for providing services to both corporations and end-users. The emphasis is on connecting with people and providing customer service rather than changing real objects. The service business includes a wide range of important services that are not tied to the manufacturing of commodities.

Organized and unorganized sector

Organized Sector

Employees who work for the government, such as state-owned corporations and private businesses, are included in the organised sector. Employees have safe work in the organised 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:

  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 a 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

In the unorganised sector, the government’s employment standards and regulations are regularly violated. A private corporation, for example, that is owned by one or more individuals. In the Indian economy, the existence of a huge number of informal or unorganised labour services is well-known. The Ministry of Work of the Government of India has classified the unorganised labour 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.

Sample Problems

Question 1: What is the significance of the term “industrial sector” in the secondary sector?


This sector is often known as the industrial sector since it gradually became associated with the various types of industries that arose.

Question 2: Why is the tertiary sector referred to as the service sector?


Teachers, for example, work in the service sector, which generates services rather than goods.

Question 3: How do we calculate a sector’s overall production for a given year?


The value of final goods and services produced in each sector during a given year determines total production for that year.

Question 4: What was the fundamental cause of the shift from the primary to secondary sectors?


It was because of the advent of new manufacturing technologies during the industrial revolution.

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Last Updated : 01 May, 2022
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