Multiple-choice questions (MCQs) with answers on “The Informal Sector in India: Significance and Challenges” tailored for the Civil Services Examination.

What is the primary characteristic of the informal sector?
- A) High wages
- B) Lack of formal contracts
- C) Government regulation
- D) Limited employment opportunities
  Answer: B) Lack of formal contracts
Which of the following is NOT typically a part of the informal sector?
- A) Street vendors
- B) Domestic workers
- C) Multinational corporations
- D) Agricultural laborers
  Answer: C) Multinational corporations
What percentage of India’s workforce is estimated to be employed in the informal sector?
- A) 25%
- B) 50%
- C) 80%
- D) 95%
  Answer: C) 80%
Which of the following is a significant challenge faced by the informal sector?
- A) High tax rates
- B) Access to credit
- C) Job security
- D) All of the above
  Answer: D) All of the above
The informal sector in India primarily contributes to which of the following?
- A) Economic growth
- B) Government revenue
- C) Formal employment
- D) None of the above
  Answer: A) Economic growth
Which of the following is a reason for the existence of the informal sector in India?
- A) High unemployment rates
- B) Globalization
- C) Rapid urbanization
- D) All of the above
  Answer: D) All of the above
Which act was introduced to protect the rights of workers in the unorganized sector?
- A) Industrial Disputes Act
- B) The Unorganised Workers’ Social Security Act
- C) MGNREGA
- D) Trade Union Act
  Answer: B) The Unorganised Workers’ Social Security Act
What is one of the key advantages of the informal sector?
- A) High job security
- B) Flexibility in employment
- C) Access to benefits
- D) Regulated working hours
  Answer: B) Flexibility in employment
Which of the following is a consequence of the informal sector’s growth?
- A) Reduced labor costs
- B) Enhanced productivity
- C) Increased social security
- D) All of the above
  Answer: A) Reduced labor costs
What is a major drawback for workers in the informal sector?
- A) Availability of jobs
- B) Lack of job security
- C) High wages
- D) Union representation
  Answer: B) Lack of job security
Which of the following sectors has a significant informal component?
- A) Manufacturing
- B) Services
- C) Agriculture
- D) All of the above
  Answer: D) All of the above
The National Policy for Skill Development aims to enhance the skills of workers in which sector?
- A) Formal sector only
- B) Informal sector only
- C) Both formal and informal sectors
- D) None of the above
  Answer: C) Both formal and informal sectors
What is a common feature of informal employment?
- A) Regular hours
- B) Uncertain pay
- C) Pension benefits
- D) Health insurance
  Answer: B) Uncertain pay
Which demographic group is most affected by the challenges of the informal sector?
- A) Senior citizens
- B) Women and children
- C) Corporate employees
- D) Government workers
  Answer: B) Women and children
Which of the following is NOT a typical job found in the informal sector?
- A) Construction labor
- B) IT professional
- C) Domestic help
- D) Street vendor
  Answer: B) IT professional
How does the informal sector contribute to the economy?
- A) By increasing tax revenue
- B) By providing employment opportunities
- C) By eliminating poverty
- D) By reducing inflation
  Answer: B) By providing employment opportunities
What is a potential benefit of formalizing the informal sector?
- A) Increased tax evasion
- B) Enhanced worker rights
- C) Job losses
- D) Reduced wages
  Answer: B) Enhanced worker rights
Which of the following policies aims to improve social security for informal sector workers?
- A) Make in India
- B) Skill India
- C) Digital India
- D) Ayushman Bharat
  Answer: D) Ayushman Bharat
What is one of the barriers to formalization of the informal sector?
- A) High levels of unemployment
- B) Excessive bureaucracy
- C) Government incentives
- D) Advanced technology
  Answer: B) Excessive bureaucracy
Which sector is known for employing a large number of informal workers?
- A) Finance
- B) Hospitality
- C) IT
- D) Education
  Answer: B) Hospitality
What percentage of GDP does the informal sector contribute to India’s economy?
- A) Approximately 10%
- B) Approximately 30%
- C) Approximately 50%
- D) Approximately 65%
  Answer: B) Approximately 30%
Which of the following is a challenge specifically faced by women in the informal sector?
- A) Equal pay
- B) Health and safety
- C) Work-life balance
- D) All of the above
  Answer: D) All of the above
What is the role of Non-Governmental Organizations (NGOs) in the informal sector?
- A) Promoting formalization
- B) Providing financial services
- C) Advocacy for worker rights
- D) All of the above
  Answer: D) All of the above
The impact of COVID-19 on the informal sector has been primarily characterized by:
- A) Increased job security
- B) Higher wages
- C) Job losses and instability
- D) Decreased worker rights
  Answer: C) Job losses and instability
Which of the following sectors is least likely to be informal?
- A) Street food vendors
- B) Information technology
- C) Construction
- D) Housekeeping
  Answer: B) Information technology
Informal workers often lack which of the following?
- A) Skills
- B) Job security
- C) Work experience
- D) Education
  Answer: B) Job security
The informal sector’s contribution to employment is most prominent in which area?
- A) Urban areas
- B) Rural areas
- C) Suburban areas
- D) Industrial regions
  Answer: B) Rural areas
Which government scheme focuses on providing credit access to informal sector workers?
- A) Pradhan Mantri Mudra Yojana
- B) Skill India Mission
- C) Digital India
- D) Atmanirbhar Bharat
  Answer: A) Pradhan Mantri Mudra Yojana
Informal sector workers are typically not entitled to:
- A) Employment contracts
- B) Social security benefits
- C) Legal protections
- D) All of the above
  Answer: D) All of the above
The informal sector can best be described as:
- A) A structured employment sector
- B) A highly regulated sector
- C) A flexible and unregulated sector
- D) A sector that employs only skilled workers
  Answer: C) A flexible and unregulated sector

These questions aim to cover various aspects of the informal sector in India, including its significance, challenges, and the socio-economic context.

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