- Informal/Unorganized Sector:
- Not registered, not taxed, not monitored by government.
- Sometimes has less than 10 workers.
- Examples: Own account enterprises (OAEs), household units, street vendors.
- Sub-sectors: manufacturing, construction, trade (wholesale and retail).
- Formal/Organized Sector:
- Registered, taxed, and monitored by government.
- Subject to labor laws and regulations.
- Firms employing more than 100 workers (historically).
- Examples: Large corporations, government entities.
| Feature | Informal Economy | Formal Economy |
|---|---|---|
| Registration | Not registered | Registered |
| Taxation | Not taxed | Taxed |
| Monitoring | Not monitored by government | Monitored by government |
| Labor Laws | Largely untouched by strict labor laws | Subject to strict labor laws |
| Productivity | Lower productivity | Much more productive |
| Examples | Street vendors, small household units | Large factories, corporate offices |