With reference to the 'Savings for old age' benefit for permanent workers, consider the following: 1. A part of the salary is kept in a fund with the government. 2. The government deducts the entire salary of the worker for this fund. 3. This fund is primarily intended to provide financial security during old age. Which of the following statements are correct ?

The correct option is (c) 1 and 3 only. Explanation For permanent workers in the organized sector, social security mechanisms such as the Provident Fund (PF) are mandated by law. These schemes are designed to ensure financial stability for employees after retirement. The Employees' Provident Fund Organisation (EPFO) is the statutory body in India that manages these funds. Statement-wise Analysis - Statement 1 is Correct: In the Provident Fund system, a specific percentage of the worker's salary (typically 12% of the basic pay and dearness allowance) is deducted and deposited into a fund maintained by the government or a government-mandated trust. The employer also contributes a matching amount to this fund. - Statement 2 is Incorrect: The government or employer does not deduct the entire salary. Only a defined fraction or percentage of the salary is deducted for social security contributions. Deducting the entire salary would leave the worker with no disposable income for immediate living expenses. - Statement 3 is Correct: The primary objective of such savings schemes (Provident Fund and Pension) is to provide financial security during old age. The accumulated savings, along with interest, are paid to the worker upon retirement, ensuring they have funds to sustain themselves when they are no longer earning a regular wage. Key Takeaway: Social security for permanent workers typically involves a Provident Fund, where a portion of the salary is saved with the government to provide financial protection post-retirement.

With reference to the 'Savings for old… - NCERT Class 6 Economics MCQ

NCERT Class 6 Economics — Chapter 2: Urban Livelihoods

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With reference to the 'Savings for old age' benefit for permanent workers, consider the following:

A part of the salary is kept in a fund with the government.
The government deducts the entire salary of the worker for this fund.
This fund is primarily intended to provide financial security during old age.

Which of the following statements are correct ?

NCERT textbook question

From NCERT Social & Political Life I · Page 84

Options

A1 and 2 only
B2 only
C1 and 3 only
D1, 2 and 3

Did you get this right?

Solution

The correct option is (c) 1 and 3 only.

Explanation

For permanent workers in the organized sector, social security mechanisms such as the Provident Fund (PF) are mandated by law. These schemes are designed to ensure financial stability for employees after retirement. The Employees' Provident Fund Organisation (EPFO) is the statutory body in India that manages these funds.

Statement-wise Analysis

Statement 1 is Correct: In the Provident Fund system, a specific percentage of the worker's salary (typically 12% of the basic pay and dearness allowance) is deducted and deposited into a fund maintained by the government or a government-mandated trust. The employer also contributes a matching amount to this fund.
Statement 2 is Incorrect: The government or employer does not deduct the entire salary. Only a defined fraction or percentage of the salary is deducted for social security contributions. Deducting the entire salary would leave the worker with no disposable income for immediate living expenses.
Statement 3 is Correct: The primary objective of such savings schemes (Provident Fund and Pension) is to provide financial security during old age. The accumulated savings, along with interest, are paid to the worker upon retirement, ensuring they have funds to sustain themselves when they are no longer earning a regular wage.

Key Takeaway: Social security for permanent workers typically involves a Provident Fund, where a portion of the salary is saved with the government to provide financial protection post-retirement.

Your note

More from Chapter 2: Urban Livelihoods

Match List I with List II and select the correct answer using the code given below: List I (Activity) | List II (Category) A. Selling newspapers on pavement | 1. Business Ownership (Self-employed) B. Stitching clothes in a factory | 2. Casual Wage Labour C. Supervising salespersons | 3. Permanent Salaried Employment D. Running a garment showroom | 4. Street Vending (Self-employed)

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Which of the following is NOT a characteristic of casual employment in factories?

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The Municipal Corporation plays a role in which of the following aspects of urban livelihoods? 1. Issuing licenses to permanent shops. 2. Deciding weekly closing days for markets. 3. Running night shelters for homeless workers. 4. Employing all street vendors.

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Match List I with List II and select the correct answer using the code given below: List I (Employment Type) | List II (Leave Policy) A. Permanent Worker | 1. No work if ill; no earnings B. Casual Worker | 2. Paid annual leave and medical leave C. Self-employed (Rickshaw puller) | 3. Flexible, but income depends on shop being open D. Business Owner | 4. No paid leave; no work means no pay

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With reference to the working conditions of street vendors, consider the following 1. They have to organise their own work, including planning purchases and setting up shops. 2. They possess permanent licenses that protect them from being dismantled by the police. 3. Food items sold by them are often prepared at home by their families who clean and sort them. Which of the following statements are correct ?

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Keep practising Chapter 2: Urban Livelihoods

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