Javatpoint Logo
Javatpoint Logo

Difference between unorganized sector and organized sector

Employment is divided into organized and unorganized sectors for the betterment and efficient management of the employment and employees. As per India's Economic analysis, almost 93% of the entire workers are working within the unorganized sector. Therefore, near 42 crores, people are working in this sector. Let us how these sectors differ from each other.

unorganized sector vs organized sector

Organized Sector

When we talk about the organized sector, the workers are working for the government such as state-owned ventures and personal sector companies are part of it. During the year 2008, the organized sector employed 27.5 million staff, of which 17.3 million were working for presidency or government possessed entities. Organized Sector might be a sector in which the service conditions are predetermined and usual, and therefore the employees get safe work as the terms and conditions of the work are mainly based on the acts and tenets selected and organized by government Just like the minuscule amount Wages Act, Payment of Gratuity Act, etc.

Main benefits of working in organized sectors:

  • Employees have the benefit of the protectionof employment.
  • In case they work extra, they'repaid more for the overtime.
  • The workers get salaried leaves, provident support, medical help, etc.
  • Essential health and hygiene services are offered to the employees, such as a free medical checkup, clean beverage, etc.
  • They work in fixed conditions of service and can't be terminated informally without any notice.
  • Entry into the organized sector is extremely hard as appropriate candidate registration is necessary, and sometimes even they have to qualify exams too.

Unorganized Sectors

Unorganized Sector is a sector in which the rules and regulation set by the government related to employment are generally not followed. For example, a private company owned by one or more individuals.

unorganized sector vs organized sector

The Indian economy is well-known for the existence of a vast number of informal or unorganized labor services. As per a study by the National Sample Survey Organization (NSSO) in 2009-10, the total employment within the nation was 46.5 crores, including approximately 2.8 crores within the organized and the left 43.7 crore staff within the unorganized sector. Out of those workforces within the unorganized segment, there are 24.6 crore people working in the agricultural sector, about 4.4 crores in production labor, and remaining in manufacturing and repair. The Ministry of Labor, Government of India, has categorized the unorganized labor force in four categories based on profession, character of service, especially distressed group, and repair group.

  • Based on occupation: This category includes minor and trivial farmers, landless agricultural laborers, fishermen, labeling and packing workers, building and building workers, leather workers, weavers, artisans, salt workers, workers in brick kilns, and more.
  • Based on the nature of employment: Agricultural manual workers, contracted workers, migrant workers, contract and informal laborers come in this class.
  • Especially troubled Category: Toddy tappers, scavengers, carriers of top loads, drivers of animal-driven means of transportation, loaders, and unloaders come in this category.
  • Service Category: Midwives, domestic workers, fishermen and girls, barbers, vegetable and fruit sellers, newspaper sellers are included in this category.

Difference between organized and unorganized sectors

Organized sector Unorganized sectors
In the organized sector, the service terms are permanent, and employees have guaranteed work, and workers work under government records and rules. There are small enterprises or businesses operating without following the rules laid by the government related to employment.
The job is normal and has permanent operational hours. If people labor extra, they are paid more. Jobs are poorly paid and generally hectic.
Workers get pleasure from the safety of service. Service is not safe. People can get fired for no proper reason.
Employees get medical and numerous further profits. No special profits are provided to the workers.
Organizations are recorded by the government and have to pursue rules and regulations. Organizations are not under the control of the government. They also create rules and regulations, but these are not appropriately pursued.
Examples: Government staff, registered business employees, etc. Examples: Shop keepers, Farmers, Domestic workers, etc.
Salaries, increments and promotions are followed properly. They are not followed properly.
It is a secure employment. Jobs are generally not secured.


After going through the entire topic, we can say that the organized sector consists of those factories, enterprises, industries, schools, hospitals, and units that are verified with the government and following the employment rules of the same. It also contains shops, clinics, and offices that own a proper license. On the opposite hand, the unorganized sector may not follow the government's employment guidelines and generally include production workers, domestic workers, workers acting on the streets, people working in tiny workshops, not united.

Besides this, there is less unemployment in the organized sector if we compare it with the unorganized sector. Many acts are applied to an organized sector like Factories Act, Bonus Act, PF Act, Minimum Wages Act, etc., while if we talk about unorganized sector, there are no such acts.

Next TopicDifference between

Youtube For Videos Join Our Youtube Channel: Join Now


Help Others, Please Share

facebook twitter pinterest

Learn Latest Tutorials


Trending Technologies

B.Tech / MCA