On the basis of employment conditions, the economy is divided into

Correct — A, organized and unorganized sectors. Economists slice the same economy three different ways depending on the question being asked. By the nature of the activity it splits into primary, secondary and tertiary. By who owns the enterprise it splits into private and public. By the conditions of employment — whether the job is registered, whether terms are regular, whether the worker gets paid leave, provident fund, gratuity and a written contract — it splits into organized and unorganized. The stem names employment conditions, so the third classification is the one being asked for. The organized sector is where enterprises are registered and the terms of work are governed by statute; the unorganized sector is small, scattered and largely outside that reach, and it employs the great majority of Indian workers.

• (b)private and public sectors — That division is by ownership, not by conditions of employment. A public sector unit and a large private company are both organized; a government contract worker and a roadside mechanic are both unorganized.
• (c)seasonal and disguised sectors — Seasonal and disguised are types of unemployment, not sectors of the economy. Nobody classifies output or enterprises under these headings.
• (d)primary, secondary and tertiary sectors — This is the classification by nature of activity — extracting from nature, manufacturing, and providing services. It says nothing about the terms on which anybody is employed.

The organized sector means enterprises registered with the government and subject to the labour statutes — the Factories Act, minimum wage law, provident fund and gratuity rules. Employment there is regular, hours are fixed, and leave is paid. The unorganized sector covers small and scattered units largely outside that framework: farm labour, construction workers, street vendors, home-based workers, most of the workers in small workshops. Jobs there are low-paid, irregular and without social security.

The Indian significance of the divide is its size. Well over four-fifths of the workforce is in the unorganized sector, while the organized sector supplies a much larger share of output than of jobs — which is why policy keeps returning to social protection delivered outside the employer relationship. Schemes built on that logic include the Atal Pension Yojana, the Pradhan Mantri Shram Yogi Maandhan pension for unorganized workers, and the e-Shram register begun in 2021. Note the classification can cut across the other two: unorganized workers are found in the primary, secondary and tertiary sectors alike, and in both private and public employment.

• By nature of activity: primary, secondary, tertiary. By ownership: public, private. By employment conditions: organized, unorganized.
• Organized-sector enterprises are registered and covered by labour legislation; unorganized ones largely are not.
• The great majority of India's workforce is in the unorganized sector, while the organized sector contributes a disproportionate share of output.
• The three classifications overlap; an unorganized job can be in any of the three activity sectors.
• The e-Shram national database of unorganized workers was launched in August 2021, the year of this paper.

• Reading 'employment conditions' as the type of work and picking the primary-secondary-tertiary split.
• Assuming the public sector and the organized sector are the same thing.
• Treating seasonal and disguised as sector names when they describe unemployment.

A definition item that hinges on one phrase in the stem. Identify the criterion named and the classification follows.

• practice — not a real PYQ

  The classification of the economy into public and private sectors is based on

  • (a)nature of the activity
  • (b)ownership of enterprises
  • (c)conditions of employment
  • (d)level of technology used

  Answer(b) ownership of enterprises — who owns and runs them.

• practice — not a real PYQ

  A worker employed without a written contract, paid leave or provident fund belongs to the

  • (a)organized sector
  • (b)unorganized sector
  • (c)public sector
  • (d)primary sector

  Answer(b) unorganized sector — defined by the absence of statutory protection at work.