Consider the following statements about the informal sector and consumer protection: 1. Moneylenders in the informal sector are strictly regulated and cannot exploit borrowers. 2. Rules and regulations are necessary to protect workers in the unorganised sector from exploitation. 3. The enforcement of laws protecting workers in the unorganised sector is generally weak. Which of the statements given above is/are correct?

The correct option is 2 and 3 only Explanation The unorganised or informal sector constitutes a significant portion of the Indian economy. It is characterized by small and scattered units which are largely outside the control of the government. Employment terms are not regular, and there is often a lack of formal legal protection and social security benefits. Statement-wise Analysis: - Statement 1 is Incorrect. Moneylenders in the informal sector operate outside the formal banking system and regulatory oversight of the Reserve Bank of India (RBI). Unlike formal financial institutions, they are not strictly regulated regarding interest rates or lending practices. This lack of regulation often allows them to charge exorbitant interest rates and exploit borrowers through unfair means. - Statement 2 is Correct. Workers in the unorganised sector are vulnerable due to low wages, irregular employment, and the absence of benefits such as paid leave, provident funds, or medical insurance. Therefore, strict rules and regulations are necessary to protect these workers from economic exploitation and to ensure fair working conditions. - Statement 3 is Correct. While laws exist to protect workers (such as the Minimum Wages Act), the enforcement of these laws in the unorganised sector is generally weak. The scattered nature of the sector, lack of awareness among workers, and inadequate administrative machinery contribute to poor implementation of protective measures. Key Takeaway: The informal sector is defined by its lack of strict government regulation and oversight, making workers and borrowers vulnerable to exploitation. Effective enforcement of labor laws remains a critical challenge in achieving inclusive growth.

NCERT Class 10 Economics — Chapter 5: Consumer Rights

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Consider the following statements about the informal sector and consumer protection:

Moneylenders in the informal sector are strictly regulated and cannot exploit borrowers.
Rules and regulations are necessary to protect workers in the unorganised sector from exploitation.
The enforcement of laws protecting workers in the unorganised sector is generally weak.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B2 only
C1 and 2 only
D2 and 3 only

Did you get this right?

Solution

The correct option is 2 and 3 only

Explanation

The unorganised or informal sector constitutes a significant portion of the Indian economy. It is characterized by small and scattered units which are largely outside the control of the government. Employment terms are not regular, and there is often a lack of formal legal protection and social security benefits.

Statement-wise Analysis:

Statement 1 is Incorrect. Moneylenders in the informal sector operate outside the formal banking system and regulatory oversight of the Reserve Bank of India (RBI). Unlike formal financial institutions, they are not strictly regulated regarding interest rates or lending practices. This lack of regulation often allows them to charge exorbitant interest rates and exploit borrowers through unfair means.
Statement 2 is Correct. Workers in the unorganised sector are vulnerable due to low wages, irregular employment, and the absence of benefits such as paid leave, provident funds, or medical insurance. Therefore, strict rules and regulations are necessary to protect these workers from economic exploitation and to ensure fair working conditions.
Statement 3 is Correct. While laws exist to protect workers (such as the Minimum Wages Act), the enforcement of these laws in the unorganised sector is generally weak. The scattered nature of the sector, lack of awareness among workers, and inadequate administrative machinery contribute to poor implementation of protective measures.

Key Takeaway:

The informal sector is defined by its lack of strict government regulation and oversight, making workers and borrowers vulnerable to exploitation. Effective enforcement of labor laws remains a critical challenge in achieving inclusive growth.

Your note

More from Chapter 5: Consumer Rights

With reference to the 'Right to Redressal', consider the following statements: 1. A consumer has the right to get compensation depending on the degree of damage. 2. Redressal can only be sought if the damage exceeds Rs 1 lakh. 3. The consumer can file a complaint with or without the services of a lawyer. Which of the statements given above is/are correct?

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With reference to the evolution of the consumer movement in India, consider the following statements: 1. The consumer movement in India originated solely due to pressure from international agencies. 2. In the 1960s, the movement was organised largely to address rampant food shortages and black marketing. 3. Until the 1970s, consumer organisations were primarily engaged in writing articles and holding exhibitions. Which of the statements given above is/are correct?

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Consider the following statements regarding the United Nations Guidelines for Consumer Protection: 1. These guidelines are legally binding treaties that supersede the domestic laws of member nations. 2. The United Nations Guidelines for Consumer Protection were adopted in 1985. 3. They mandate that all member nations must enforce a single uniform consumer protection code drafted by the UN. Which of the statements given above is/are correct?

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With reference to the 'Right to Information' for consumers, consider the following statements: 1. It is mandatory for manufacturers to display the expiry date on medicine packets. 2. The Right to Information Act (RTI) enacted in 2005 applies exclusively to private sector companies. 3. Consumers have the right to be informed about the particulars of goods and services to protect against unfair trade practices. Which of the statements given above is/are correct?

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With reference to the 'Right to Choice', consider the following statements: 1. Once a service contract is signed, a consumer has no right to discontinue the service before the contract period ends. 2. Forcing a customer to buy a stove as a condition to get a gas connection is a violation of the Right to Choice. 3. Educational institutions are exempt from the Right to Choice provisions and are not liable to refund fees. Which of the statements given above is/are correct?

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The correct option is 2 and 3 only

Explanation

Statement-wise Analysis:

Statement 1 is Incorrect. Moneylenders in the informal sector operate outside the formal banking system and regulatory oversight of the Reserve Bank of India (RBI). Unlike formal financial institutions, they are not strictly regulated regarding interest rates or lending practices. This lack of regulation often allows them to charge exorbitant interest rates and exploit borrowers through unfair means.
Statement 2 is Correct. Workers in the unorganised sector are vulnerable due to low wages, irregular employment, and the absence of benefits such as paid leave, provident funds, or medical insurance. Therefore, strict rules and regulations are necessary to protect these workers from economic exploitation and to ensure fair working conditions.
Statement 3 is Correct. While laws exist to protect workers (such as the Minimum Wages Act), the enforcement of these laws in the unorganised sector is generally weak. The scattered nature of the sector, lack of awareness among workers, and inadequate administrative machinery contribute to poor implementation of protective measures.

Key Takeaway: