FORMAL:-1.These resources work under the supervision of RBI.
2.Rate of interest is very low.
3. Commercial banks, cooperative societies, etc are the main sources of formal credit.

INFORMAL:-
1.These resources do not work under the supervision of any government organization.
2. Rate of interest is very high.
3. Relatives, moneylenders, etc are the main sources of the informal credit.

Definition and Structure
The formal sector refers to the part of the economy that is regulated by the government, which includes businesses that are registered and follow legal requirements. In contrast, the informal sector consists of unregistered and unregulated businesses that operate outside of government oversight.

Regulation and Compliance
- Formal Sector: Businesses in this sector comply with labor laws, tax regulations, and safety standards, which ensures worker rights and benefits.
- Informal Sector: These businesses often do not adhere to formal regulations, resulting in a lack of job security and benefits for workers.

Employment Conditions
- Formal Sector: Employees typically enjoy better job security, stable wages, and access to benefits such as healthcare and pensions.
- Informal Sector: Workers may face precarious employment conditions, with irregular income and no social safety nets.

Economic Impact
- Formal Sector: This sector contributes significantly to national GDP and tax revenues, which fund public services and infrastructure.
- Informal Sector: While it can provide livelihoods for many, it often operates outside the tax system, reducing its contribution to public finances and economic stability.
In summary, the formal and informal sectors differ in terms of regulation, employment conditions, and economic contributions. Understanding these differences is vital for policymakers aiming to promote inclusive economic growth and improve labor conditions.