State two distinguishing features of the informal sector in India.
Answer
The informal sector is unregistered and untaxed, and its workers do not receive social security benefits.
The correct answer is The informal sector is unregistered and untaxed, and its workers do not receive social security benefits. — Mention that workers in this sector lack formal social security benefits.
Step-by-step solution
- Identify that the informal sector operates outside government registration.
- Explain that because it is unregistered, activities are not taxed.
- Mention that workers in this sector lack formal social security benefits.
Common mistake: Mentioning only one feature or confusing informal with unorganized sector
Concept tested: Informal sector characteristics
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