Define the informal sector as used in Indian labour statistics and state its approximate share in total employment according to the NSSO 2017‑18 data. Also give one key reason for its large share.
Answer
The informal sector comprises workers without legal or social security benefits and accounts for about 90 % of total employment in 2017‑18; a key reason is the predominance of low‑skill, low‑productivity activities in agriculture and services.
Step-by-step solution
- State the definition: workers not covered by statutory social security and operating in unregistered enterprises.
- Quote the NSSO 2017‑18 figure: roughly 90 % of all employed persons are in the informal sector.
- Identify a major reason: most economic activity in India is low‑skill and low‑productivity, especially in agriculture and informal services.
- Connect the reason to the high share: such activities are less likely to meet formal registration requirements.
Common mistake: Confusing the share of informal employment with the unemployment rate.
Concept tested: Informal sector definition and size
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