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Notes
- 1.
Bardhan (2009), in his critique of Sanyal and Bhattacharya (2009), has argued that exclusion may not be inherent in the process of capitalist development—he cites China as an example of a country that has possibly exhausted its reserve of surplus labor through a process of rapid capital accumulation. He argues that exclusion results from policies (not limited only to the oft-cited labor laws) that obstruct the pace and diffusion of capitalist accumulation. Within India, Bardhan argues, there are regional variations in the rate of capitalist accumulation and they can be attributed to the state-level policy differences. Noting the peculiarities of the Indian society, Bardhan concludes that “[t]he Indian transition is thus bound to be rather tortuous, though in the long run inexorable, and its narrative will be more complex than usual” (ibid: p.35). In the following section, on the basis of NSSO data on informal manufacturing sector in India, we argue that the informal sector, in terms of production relations, is largely constituted by a non-capitalist “outside” of capital. However, based on the limited empirical analysis in the space of this chapter, and the available data, we have no way to throw light on the processes (e.g. “exclusion” in Sanyal (2007) and Sanyal and Bhattacharya (2009)) behind persistence of such a non-capitalist “outside of capital”. Ultimately we differ with Bardhan on the ontology of capital that grounds our respective positions. Bardhan argues that a full transition to capitalism is inevitable, if only delayed due to policy interventions; we argue that policy interventions are endogenous to the process of capitalist development, being products of capital-labor contradictions within the circuits of capital. Hence, even if we accept that policy interventions are behind the persistence of informality, it only reinforces our argument that the nature of capitalist development itself renders its fullness impossible.
- 2.
The survey included 2260 urban enterprises that were part of the “list frame” of the survey, comprising of “very big” non-ASI enterprises. These enterprises are included in the unorganized sector since they are not covered in the ASI, but their economic characteristics are very different from the other unorganized sector enterprises (e.g., the gross value of output for these enterprises in 2001 were more than six times the average value of output of the enterprises in the small-scale industry in the urban areas [NSSO 2007a, b: B-3]). These enterprises were not considered for the analytical purposes of this chapter. The remaining 80,637 enterprises (42,050 rural and 38,587 urban enterprises) from the “area frame” of the survey, covering 4,798 villages and 5,125 urban blocks from all the 29 states and 6 union territories, were considered for analysis. However, some of these enterprises do not conform to the definition of the informal sector (though they were part of the unorganized sector) and, hence, are not part of the present analysis. Of the 80,637 enterprises, it was found that 377 enterprises did not operate on a proprietary or partnership basis. Among the rest, 2,870 enterprises had 10 or more total worker, and an additional 25 enterprises did not have proper information on the total number of workers. These 3,272 enterprises were not considered for this analysis. Thus the present analysis is based on the remaining 77,365 sample enterprises, a subset of the unorganized manufacturing sector surveyed in the 62nd round (about 93 % of the original sample), representing an estimated 16,798,700 enterprises (about 98 % percent of the estimated population of unorganized enterprises) that conform to the international as well as the Indian definition of an informal enterprise. These informal sector enterprises engage an estimated 32,331,802 workers (i.e., about 88.7 % of the estimated 36,442,799 unorganized manufacturing sector workers; and about 71 % of all workers who are engaged in manufacturing activities, organized and unorganized). The population estimates from the sample for all analyses in this chapter are calculated by using the weights provided by the NSSO along with the unit-level data.
- 3.
Resnick and Wolff (1987) characterize a class structure in terms of fundamental and subsumed class processes. The former refers to the production and appropriation of surplus labor produced by direct producers; the latter refers to the processes by which the appropriators of surplus labor distribute it to those who provide conditions of existence of the fundamental class process. The identification of a class structure as capitalist or non-capitalist (self-appropriative, feudal, slave, communist, etc.) depends on specifying the mode of appropriation of surplus, the particular political, cultural, economic, and natural conditions of existence of that mode and hence the subsumed classes responsible for providing those conditions. See Bhattacharya (2010) for the details and the implications of such classifications for the informal economy. In Sanyal (2007), the formal and informal economies are not class-specified, but are rather conceptualized around the logic of production—production for consumption/need in the “need-economy” and production for accumulation in the “accumulation-economy”. The “need-economy” and “accumulation-economy” can each accommodate both capitalist and non-capitalist enterprises. While both the above approaches are important in the context of understanding the informal economy, our purpose in this essay is limited. Given that the NSSO data does not allow us to precisely identify the mode of appropriation of surplus and its conditions of existence, nor does it allow us to identify the objective of production (need or accumulation), we treat enterprises with hired labor as capitalist enterprises and enterprises run on own and family labor as non-capitalist (self-appropriative) enterprises. DMEs and NDMEs have at least one hired laborer combined often with own and family labor, while OAMES are run soley on own and family labor. We understand DMEs and OAMEs as predominantly capitalist and non-capitalist (self-appropriative) in nature respectively, while NDMEs partake the character of both to substantial degrees. Of course, in identifying this way, we ignore other non-capitalist class processes involving family labor (e.g. feudal) in all of these enterprises. However, given the nature of the data such finer theoretical distinctions are hardly empirically tractable, though their theoretical significance needs to be acknowledged. In our analysis, predominance of a particular class process in an enterprise simply means the quantitative predominance of hired labor versus own plus family labor, as calculated from unit-level data.
- 4.
Here we consider the positions of two part-time workers as one full-time position.
- 5.
In Marxian terms, volume of surplus increases with the number of exploitable wage workers.
- 6.
Think of health and education, both of which are normally accepted necessities for reproduction of labor power in the formal sector. Once socially established as a norm, it enters the subsistence basket of the informal producers too, although the ability to access such basic services in a privatized healthcare and education system is markedly different for the average formal and informal sector worker. In this case, the evolution of the capitalist economy—with its requirement of more productive, educated, and healthy labor force—influences the notion of subsistence in the noncapitalist economy. Just by looking at rising income and productivity in the noncapitalist informal economy, one cannot infer that accumulation is taking place, without making a prior assumption regarding the level of subsistence.
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Bhattacharya, R., Bhattacharya, S., Sanyal, K.K. (2013). Dualism in the Informal Economy: Exploring the Indian Informal Manufacturing Sector. In: Banerjee, S., Chakrabarti, A. (eds) Development and Sustainability. Springer, India. https://doi.org/10.1007/978-81-322-1124-2_14
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