Models of Formal–Informal Dichotomy

Chakrabarti, Saumya

doi:10.1093/acprof:oso/9780199466061.003.0002

Cited by 5 publications

(7 citation statements)

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“…The household enterprises (OAMEs) in India are usually subsistence-driven enterprises that are unable to retain sufficient funds for accumulation and further expansion, whereas establishments are able to retain such funds, albeit at a small scale (Bhattacharya andKesar, 2018, 2020). Furthermore, for household enterprises the economic logic of the enterprise and the consumption logic of the household owning the enterprise are closely enmeshed and cannot be strictly separated, whereas for the establishments, these two aspects are often distinct: see Berner et al (2012), Bhattacharya et al (2013), Chakrabarti (2016), Harriss-White (2014), Moser (1978) and Sanyal (2007) for characterizations of dualism between the traditional and modern economic spaces. However, the subcontracted household enterprises, whose production processes are integrated with larger capitalist firms through subcontracting linkages and are subsumed under their operational logic, cannot be characterized to be non-capitalist in nature.…”

Section: Subcontracting Linkages and Economic Transformationmentioning

confidence: 99%

“…It is argued that while the growth process dispossesses workers from the traditional/non‐capitalist segment, it does not absorb them into the expanding capitalist segment, rendering many of them redundant or surplus for the process of capitalist growth and accumulation. To secure its livelihood conditions, this surplus population is forced to continually reproduce subsistence‐driven informal economic activities (Bhattacharya, 2017; Bhattacharya and Kesar, 2020; Chakrabarti, 2016).…”

Section: Subcontracting Linkages and Economic Transformationmentioning

confidence: 99%

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Subcontracting Linkages in India's Informal Economy

Kesar

2024

Development and Change

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Subcontracting relations have often been considered a key channel to facilitate growth in traditional informal enterprises and enable them to transition into larger, modern enterprises. Such relations are expected to strengthen with economic growth. Using nationally representative survey data for the Indian informal manufacturing sector, this article examines the nature and patterns of subcontracting linkages for informal family‐based household enterprises over the high‐growth period of 2001–2016. The article estimates the net accumulation fund (NAF) for these enterprises, which measures their ability to accumulate, and studies the transition possibilities of subcontracted enterprises over time. Results show that the NAFs of subcontracted enterprises remained much lower than those of non‐subcontracted ones, with the disparity growing over the growth period. A vast majority of subcontracted household enterprises are embedded in relations that are akin to a traditional putting‐out system, with little control over their production processes. Female‐owned enterprises and those located within the household are more likely to be in such put‐out relations. Average NAF for put‐out household enterprises has been lower than for relatively autonomous subcontracted and non‐subcontracted firms, although over time the gap in NAF between put‐out and non‐put‐out firms, and thus their differential ability to transition, has narrowed. The prevailing nature of subcontracting relations in India's informal economy, even during the peak growth period, appears to be starkly different from the dynamic linkages that are celebrated in the literature as a channel for facilitating growth and transition.

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Section: Subcontracting Linkages and Economic Transformationmentioning

confidence: 99%

Section: Subcontracting Linkages and Economic Transformationmentioning

confidence: 99%

Subcontracting Linkages in India's Informal Economy

Kesar

2024

Development and Change

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“…Under such circumstances, these segments persist as a holding ground of this redundant population. The course of economic growth led by the formal capitalist sector thereby results in a recurrent process of dispossession accompanied by a reconstitution of informal non‐capital spaces (Bhattacharya, 2017; Chakrabarti, 2016; Bhattacharya et al, 2013, 2023; Bhattacharya & Kesar, 2018, 2020; Kesar & Bhattacharya, 2020; Sanyal, 2007; also see Bhaduri, 2018).…”

Section: Informality Dualism and Transformationmentioning

confidence: 99%

Economic transition, dualism and informality inIndia: Nature and patterns of household‐level transitions

Kesar

2023

Review Development Economics

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We examine the Indian economy during a peak period of high growth between 2005 and 2012 to analyse the nature and patterns of household‐level transitions across different sectors, characterised by varying degrees of formality/informality and various production structures and labour processes. We find that even within this brief period, there has been a huge volume of household‐level transitions across sectors. However, the overall economic structure, and its segmentations, has continued to be reproduced, along with a regeneration of ‘traditional’ non‐capitalist informal spaces. To ascertain the nature of household‐level transitions in terms of economic well‐being, we employ a counterfactual analysis. We find that majority of transitions in the economy have been ‘unfavourable’ in nature, with large proportion of households undergoing sectoral transitions that are not optimal for them, given their socio‐economic characteristics. Furthermore, the likelihood of ‘favourable’ versus ‘unfavourable’ sectoral transition, on average, significantly varies with household characteristics, some of which, like social caste, are structurally given and cannot be optimally chosen by households. Drawing upon this analysis, we reflect on the competing strands of literature that seek to explain the persistence of informality. Our analysis highlights the complexity of India's contemporary development trajectory, whereby the pre‐existing economic structure is reproduced, paradoxically, through a continuous reshuffling and reconstitution of economic spaces, accompanied by significant volume of ‘unfavourable’ household‐level sectoral transitions.

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“…10 In the development literature, such PCP units are usually seen as vestiges of a pre-capitalist past that are expected to wither away over time or to transition into capitalist enterprises with economic growth. The continued persistence and widespread prevalence of such PCP units in India despite a sustained period of economic growth is often seen as the basic marker of a fundamental fracture within the economy (Sanyal 2007; Harriss-White 2014; Chakrabarti 2016; Bhattacharya 2017). As of 2010–11, almost half of the total workforce in the Indian economy were deriving their livelihood from such PCP units, either as self-employed own-account workers or as family labor in such household enterprises (NSSO 2013).…”

Section: Petty Commodity Productionmentioning

confidence: 99%

Precarity and Development: Production and Labor Processes in the Informal Economy in India

Bhattacharya

Kesar

2020

Review of Radical Political Economics

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We take off from the recent critiques of precarity as an emerging global phenomenon to argue that the processes of precarity in the Global North and the Global South need to be analytically distinguished to bring forth their specificities. We further argue that such an analysis challenges the idea of development as transition, as is prevalent in much of the literature. We focus on the informal economy in India to show that the notion of precarity conceptually involves three distinct aspects of production and labor processes—“non-capitalist” petty commodity production (PCP), subcontracted PCP, and informal wage-labor. We argue that these dimensions have their own particularities that have distinct implications for the process of capitalist development in India. We contend that reproduction of these informal spaces during a period of high economic growth unsettles the imaginary of development as transition. JEL classifications: O17, J46, B51

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Models of Formal–Informal Dichotomy

Cited by 5 publications

References 0 publications

Subcontracting Linkages in India's Informal Economy

Subcontracting Linkages in India's Informal Economy

Economic transition, dualism and informality inIndia: Nature and patterns of household‐level transitions

Precarity and Development: Production and Labor Processes in the Informal Economy in India

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