Difference between Organized Sector and Unorganized Sector
The economy of a country can be divided into two sectors: the organized sector and the unorganized sector.
The main difference is that the organized sector refers to businesses and industries that are formal, regulated, and have established systems and procedures in place while the unorganized sector refers to businesses and industries that are informal, unregulated, and have limited systems and procedures.
Before we move to the differences, let’s understand what are Organized Sector and Unorganized Sector:
- Organized Sector: The organized sector refers to businesses and industries that are registered, regulated, and have established systems and procedures in place. These businesses typically have formal employment contracts, pay taxes, and follow established labor laws.
- Unorganized Sector: The unorganized sector refers to businesses and industries that are informal, unregulated, and have limited systems and procedures in place. These businesses may not have formal employment contracts, may not pay taxes, and may not follow established labor laws.
Now, let’s move to Organized Sector vs Unorganized Sector:
Major differences between Organized Sector and Unorganized Sector
| Organized Sector | Unorganized Sector |
|---|---|
| The organized sector has formal employment contracts. | The unorganized sector may not have formal employment contracts. |
| The organized sector is registered and regulated. | The unorganized sector is informal and unregulated. |
| The organized sector has established systems and procedures. | The unorganized sector has limited systems and procedures. |
| The organized sector pays taxes. | The unorganized sector may not pay taxes. |
| The organized sector follows established labor laws. | The unorganized sector may not follow established labor laws. |
That’s it.
Note that sometimes, the question might also be asked as “distinguish between Organized Sector and Unorganized Sector”.
Also see:
- Difference between Organized Retailing and Unorganized Retailing
- Difference between Turgor Pressure and Wall Pressure
- Difference between Signature and Autograph
Final words
Both the organized and unorganized sector play important roles in the economy. The organized sector drives economic growth and development, while the unorganized sector provides livelihoods for millions of individuals, particularly in rural areas.
It is important for governments to provide support and regulation to both sectors in order to promote economic stability and growth.
You can view other “differences between” posts by clicking here.
If you have a related query, feel free to let us know in the comments below.
Also, kindly share the information with your friends who you think might be interested in reading it.
