NCERT Class 11 Economics — Chapter 7: Employment: Growth, Informalisation and Other Issues

mcqeasy

Trade unions are a characteristic feature of which sector?

Official previous-year question

Verified 1 Aug 2026.

Options

AFormal Sector
BInformal Sector
CUnorganised Sector
DAgricultural Sector

Did you get this right?

Solution

The correct option is Formal Sector.

Explanation

The economy is broadly classified into the organized (formal) and unorganized (informal) sectors based on the nature of employment, adherence to government regulations, and the provision of social security. The presence of institutional mechanisms for worker representation is a key differentiator between these sectors.

Option Analysis

Formal Sector (Correct): This sector comprises enterprises registered with the government and subject to labor laws such as the Factories Act and the Industrial Disputes Act. Workers in this sector enjoy job security, social security benefits, and the legal right to form and join trade unions to safeguard their interests through collective bargaining.
Informal/Unorganized Sector (Incorrect): This sector consists of small, scattered units that are largely outside the control of the government. Employment is often casual, irregular, and low-paid. Due to the lack of formal contracts and legal protection, trade unions are generally absent or ineffective.
Agricultural Sector (Incorrect): In India, agriculture is predominantly part of the unorganized sector. While some plantation workers (organized agriculture) may have unions, the vast majority of agricultural laborers are unorganized and lack union representation.

Key Takeaway

Trade unions are a characteristic feature of the Formal (Organized) Sector, serving as a tool for collective bargaining and the enforcement of labor rights guaranteed by statutory laws.

Your note

More from Chapter 7: Employment: Growth, Informalisation and Other Issues

With reference to the definition of ‘workers’ in the Indian economy, consider the following statements: 1. Self-employed individuals are considered workers in the Indian economy. 2. A person temporarily abstaining from work due to illness is excluded from the worker category. 3. Those who help main workers in economic activities without receiving direct payment are included in the category of workers. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the ‘Worker-Population Ratio’ in India: 1. It is defined as the total population divided by the number of workers. 2. The worker-population ratio is generally higher in rural areas compared to urban areas. 3. A higher ratio indicates that a greater proportion of the population is actively contributing to the production of goods and services. Which of the statements given above is/are correct?

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With reference to the concepts of Gross Domestic Product (GDP) and Gross National Product (GNP), consider the following statements: 1. GNP is calculated by deducting the value of exports from the GDP. 2. GDP is the total money value of all final goods and services produced in a country in a year. 3. The net earning from foreign transactions is always positive for a developing country like India. Which of the statements given above is/are correct?

easy

Consider the following statements regarding the participation of women in the workforce in India: 1. Women constitute the majority of the workforce in rural India. 2. The worker-population ratio for women is significantly higher in urban areas than in rural areas. 3. Many household activities performed by women are not recognised as productive work, leading to an underestimation of women workers. Which of the statements given above is/are correct?

medium

The term "Squatters" in the context of the informal sector refers to:

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The correct option is Formal Sector.

Explanation

Option Analysis

Formal Sector (Correct): This sector comprises enterprises registered with the government and subject to labor laws such as the Factories Act and the Industrial Disputes Act. Workers in this sector enjoy job security, social security benefits, and the legal right to form and join trade unions to safeguard their interests through collective bargaining.
Informal/Unorganized Sector (Incorrect): This sector consists of small, scattered units that are largely outside the control of the government. Employment is often casual, irregular, and low-paid. Due to the lack of formal contracts and legal protection, trade unions are generally absent or ineffective.
Agricultural Sector (Incorrect): In India, agriculture is predominantly part of the unorganized sector. While some plantation workers (organized agriculture) may have unions, the vast majority of agricultural laborers are unorganized and lack union representation.

Key Takeaway

Trade unions are a characteristic feature of the Formal (Organized) Sector, serving as a tool for collective bargaining and the enforcement of labor rights guaranteed by statutory laws.