Classifications of Economy

1.Organized Sector: The sector which carries out all activity through a system and follows the law of the land is called organized sector. Moreover, labour rights are given due respect and wages are as per the norms of the country and those of the industry. Labour working organized sector get the benefit of social security net as framed by the Government. Certain benefits like provident fund, leave entitlement, medical benefits and insurance are provided to workers in the organized sector. These security provisions are necessary to provide source of sustenance in case of disability or death of the main breadwinner of the family without which the dependent will face a bleak future.

2.Unorganized Sector: The sectors which evade most of the laws and don’t follow the system come under unorganized sector. Small shopkeepers, some small scale manufacturing units keep all their attention on profit making and ignore their workers basic rights. Workers don’t get adequate salary and other benefits like leave, health benefits and insurance are beyond the imagination of people working in unorganized sectors.

3.Public Sector: Companies which are run and financed by the Government comprises the public sector.After independence India was a very poor country. India needed huge amount of money to set up manufacturing plants for basic items like iron and steel, aluminium, fertilizers and cements. Additional infrastructure like roads, railways, ports and airports also require huge investment. In those days Indian entrepreneur was not cash rich so government had to start creating big public sector enterprises like SAIL(Steel Authority of India Limited), ONGC (Oil & Natural Gas Commission).

 4.Private Sector: Companies which are run and financed by private people comprise the private sector.Companies like Hero Honda, Tata are from private sectors.