Discuss briefly the concept of informalisation of workforce in India

Question – Discuss briefly the concept of informalisation of workforce in India

Answer –

In formalisation of force refers to a situation in which a percentage of the total workforce in the formal sector tends to decline the and percentage of the total workforce in the informal sector tends to rise over time.

Reasons for formalisation

1. After the introduction of economic reforms in 1991, there is a significant transformation from controlled economy to a market economy which encouraged privatization and disinvestment.
2. Formal sectors tend to shift to capital intensive technology to be more efficient and competitive.
3. Relaxation of labour law permits retrenchment of labour. Therefore, producers do not prefer to employ regular.

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