The correct option is 1, 2 and 4 only.
Explanation
The informal or unorganized sector in India consists of unincorporated private enterprises owned by individuals or households. It is characterized by small-scale operations, labor-intensive methods, and a lack of formal legal status or registration with government authorities.
Statement-wise Analysis:
- Statement 1 is Correct: The informal sector typically suffers from a lack of capital and access to formal credit. Consequently, production relies on labor-intensive methods and traditional or outdated technology rather than modern, capital-intensive machinery.
- Statement 2 is Correct: Enterprises in the informal sector are generally not legally distinct from the households that own them. They rarely maintain formal books of accounts, balance sheets, or undergo audits, making it difficult to tax or regulate them effectively.
- Statement 3 is Incorrect: Employment in the informal sector is characterized by casual nature, seasonality, and a lack of written contracts. Workers do not have guaranteed regular income; their earnings fluctuate based on daily work availability.
- Statement 4 is Correct: Workers in the informal sector generally fall outside the purview of statutory labor laws and social security measures (such as the Employees' Provident Fund or Employees' State Insurance). They lack legal protection regarding working hours, minimum wages, and job security.
Key Takeaway:
The informal sector is defined by the absence of formal registration, lack of social security for workers, use of low-level technology, and non-maintenance of formal accounts, distinguishing it from the organized sector.