The correct option is 2 only
Explanation
Informalisation of the workforce refers to a situation where a significant proportion of the labour force is engaged in the unorganized sector, or where workers within the formal sector lack employment security and social security benefits. This phenomenon indicates a disconnect between economic growth and the generation of quality, formal employment.
Statement-wise Analysis:
- Statement 1 is Incorrect: A structural feature of the Indian economy is that the proportion of workers in the informal sector has remained consistently high (over 90%) despite robust economic growth. This indicates that the benefits of growth have not sufficiently translated into the creation of formal jobs, leading to "jobless growth" in the organized sector.
- Statement 2 is Correct: The formal sector has been unable to absorb the growing labour force. Due to the capital-intensive nature of growth in the organized sector and rigid labour laws, the employment elasticity remains low. Consequently, the surplus labour force is forced to seek livelihood in the informal sector.
- Statement 3 is Incorrect: The primary distinction between the formal and informal sectors is the presence of social security and job regularity. Informal sector workers are characterized by irregular income, lack of written contracts, and the absence of social security benefits such as provident funds, gratuity, and paid leave.
Key Takeaway:
Informalisation describes the persistence or increase of the workforce in the unorganized sector, characterized by low productivity, lack of social security, and job insecurity, despite the overall expansion of the economy.