Step 1: Defining the two sectors.
The formal (or organized) sector consists of all public sector establishments and private companies employing ten or more hired workers. These are regulated by the government. The informal (unorganized) sector includes millions of small enterprises, farmers, and casual laborers who operate outside the purview of official labor laws.
Step 2: Defending the statement (Benefits of Formal Sector).
The statement is largely defensible because formal employment provides a "social security umbrella." Workers receive regular salaries, gratuity, provident fund, and pension benefits. They also enjoy legal protection regarding working hours and workplace safety, which ensures a higher quality of life. For instance, a bank employee has guaranteed medical leave, whereas a street vendor has no such safety net.
Step 3: A nuanced perspective (Role of the Informal Sector).
One could argue that the informal sector is the backbone of employment in developing nations like India, providing livelihoods when the formal sector fails to generate enough jobs. While it lacks structured benefits, it offers flexibility and entrepreneurship opportunities for those with limited formal education. However, in terms of "security" and "assured benefits," the formal sector remains superior.