Correct Option
The correct option is 1 and 2 only.
Explanation
The Informal Sector (or Unorganized Sector) in India refers to economic activities that are not taxed or monitored by the government, and are not included in the Gross National Product (GNP) in the same way as the formal sector. It is characterized by the absence of employment security, lack of social security benefits, and units that are generally not registered under statutory acts like the Factories Act.
Statement-wise Analysis
- Statement 1 is Correct: The agricultural sector forms the backbone of the informal economy in India. It encompasses millions of farmers, sharecroppers, and agricultural labourers who operate without formal employment contracts or social security coverage.
- Statement 2 is Correct: The informal sector includes a vast number of "own-account enterprises." These are small units owned and operated by self-employed individuals (such as street vendors, artisans, and small shopkeepers) who do not employ hired workers on a regular basis.
- Statement 3 is Incorrect: Non-farm casual wage labourers are a critical component of the informal sector. These include construction workers, head-loaders, and daily wage earners who may work for multiple employers. They are included in the informal sector because they lack job security and social benefits, contrary to the statement which claims they are excluded.
Key Takeaway
Key Takeaway: The informal sector comprises the entire agricultural sector (farmers and labourers), self-employed individuals (own-account workers), and casual wage labourers in non-farm sectors who lack formal social security and employment benefits.