Abstract
In the context of development, the informal sector assumes importance owing to its large workforce; all the more so, because it is a major site of exclusion. A study of this sector has, therefore, become essential from the standpoint of the mainstream strategy of inclusive growth. It is opined by the dominant discourse that a major part of this informal sector could, in fact, act as dynamic micro-capital and thereby, could engender an inclusive growth process. In this context, we have tried to understand, whether the informal firms have the potential to survive and grow as micro-capital or they are just subsisting and even decaying as non-capitalistic petty firms, using quantitative as also qualitative information collected through primary surveys, focus group discussions and individual interviews on a variety of unorganised/informal manufacturing units engaged in iron forging and fabrication and in handloom weaving. We have tried to understand these tendencies focusing on various aspects like production organisation, especially owner–labourer relation, market structure, especially hierarchies and bottlenecks and on abilities/intensions of the firms to survive/grow. We have also considered certain firm-characteristics as well as socio-economic-cultural features of the surveyed locations to analyse how firm behaviours (as micro-capital or non-capital) are influenced by these firm-traits and environment. Summarising our results and engaging with the literature, we could say that, although, a few firms may be behaving like dynamic micro-capital (Bardhan in Econ Polit Wkly 44:31–36, 2009; Marjit and Kar in The outsiders: economic reform and informal labour in a developing economy, Oxford University Press, New Delhi, 2011) having symptoms of progression and some control over markets, overwhelming majority, without much of owner–worker separation and almost no control over markets, is able and/or interested in maintaining their existence only (Sanyal in Rethinking capitalist development: primitive accumulation, governmentality and post-colonial capitalism, Routledge, New Delhi, 2007; Chatterjee in Econ Polit Wkly 19:53–62, 2008).
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Notes
- 1.
“In fact, both informal manufacturing units and self-employed units accumulate fixed assets, invest and prosper, and they may do so even at a time when their formal counterparts show much less dynamism.” (Marjit and Kar 2011, pp. 6).
- 2.
“I conceptualise it as a need economy. I see it as an ensemble of economic activities undertaken for the purpose of meeting needs, as distinct from activities driven by an impersonal force of systemic accumulation.” (Sanyal 2007, pp. 209).
- 3.
“In the unorganised sector, in addition to the unincorporated proprietary or partnership enterprises (i.e. informal enterprises), enterprises run by cooperative societies, trusts, private and public limited companies (Non-ASI) are also covered. The informal sector can therefore be considered as a subset of the unorganised sector” (NSSO 2001, report no: 459, pp. 3).
- 4.
Who consider themselves as ‘shilpi’, i.e. artists.
- 5.
- (a)
“Now cannot keep worker. Even cannot manage own expenses; how can I pay them?”—An interviewee of Asansol. Thus, to reduce cost, the owner intensifies his work effort considerably.
- (b)
“The wages given to the skilled hired workers are not enough. To earn a bit more than the wage received, they open their own workshop which intensify the existing competition. This increased competition forces us now to work in the factory as worker.”—An interviewee of Bolpur. Thus, the pressure of competition restricts the price and size of market; on the other hand, costs are rising. To maintain a minimum standard of living, the owner has to work.
- (a)
- 6.
In Dhaniakhali, for all the sample firms, a specific part of the production process (drumming) is done by a few community members against a payment which has been incorporated within costs of production subsequently in Sect. 3.3.
- 7.
Our repeated visits to Asansol revealed that, within a span of just one year, establishments hiring labour have turned into self-employed units with the owner being compelled to undertake every part of the work; owner–managers are turning into owner–workers. Similar tendencies have been noted in Bolpur too.
- 8.
Long-term contractual relationship between the contractors/Mahajans and the weavers over generations having hierarchical power relations (biased in favour of contractors) with both beneficial and exploitative elements.
- 9.
Grill—4′ × 4′: Asansol (Rs. 60/kg × 30 kg) Rs. 1800; Bolpur (Rs. 58/kg × 27.5) Rs. 1595
Sheet Gate—6′ × 3′: Asansol (Rs. 65/kg × 70 kg) Rs. 5000; Bolpur (Rs. 62/kg × 60) Rs. 3720
Almirah—36 gauge: Asansol (Rs. 7500–8000 per piece); Bolpur (Rs. 6500–7000 per piece)
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Acknowledgments
Pratip Kumar Datta: The author takes this opportunity to express his gratitude to Professor Sarmila Banerjee who has not only been a great teacher but also a great source of inspiration.
Saumya Chakrabarti: The author is thankful to the editors for giving him a precious scope to express his deep gratitude to Professor Sarmila Banerjee who not only taught him the fundamentals of firm and market and helped him to enter into the world of political economy of labour but also guided him to get a humble place in academia. The author thanks his colleagues of the Department of Economics and Politics and of the administration at Visva-Bharati, Santiniketan, for allowing him Sabbatical Leave to work on the issue.
The authors are indebted to Rishav Mukherjee, Arindam Saha, Sandip Mahato, Mithun Singha Roy, Debangee Karmakar, Jhinuk Banerjee, Jayati Chatterjee, Durba Ahmed, Sonali Das and Rajkumar Kundu for a variety of research support. Rishav Mukherjee helped the authors tremendously, not only in administrative works, but also with his academic inputs. Comments from especially Amit Bhaduri, and also from Tirthankar Roy, Malabika Roy, Simantini Das, Bratati Chattopadhyay, Santadas Ghosh, Achiranshu Acharyya, Biswajit Mandal and Suman Ray have been beneficial. Financial help from ICSSR (GoI; F.No. 02/210/2016-17/RP, dated 30.03.2017) and UGC-SAP (Department of Economics and Politics, Visva-Bharati, Santiniketan) are gratefully acknowledged. The authors are thankful to the following persons for logistic support: Amit Mukherjee, Rathin Nag, Ansari, SentuSk, RentuSk, Bharat Das, Malay Ray, Saju Bagdi, Gadadhar Hazra, Dayamoy Dutta, Pritikana Char and Subrata Mukherjee. They are also grateful to the following government and non-government offices: Directorate of handloom & handicrafts—Birbhum, Tantipara Panchayat, Dhaniakhali Tant Cooperative Society, etc. Authors acknowledge Rathin Nag, Ganesh Shaw, Ansari, SentuSk, RentuSk, Bharat Das, Mohan Das, Tarak Das, Malay Ray, Gadadhar Hazra and Dayamoy Dutta for participation in the FGDs and personal interviews, and are grateful to all the respondents of the primary survey. The authors are also indebted to the referee for substantive comments, which have induced them to have a deeper look at the issue. However, the usual disclaimer applies.
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Mukherjee, A., Saha, N., Datta, P.K., Chakrabarti, S. (2019). Informal Sector: Progression or Persistence?. In: Bandyopadhyay, S., Dutta, M. (eds) Opportunities and Challenges in Development. Springer, Singapore. https://doi.org/10.1007/978-981-13-9981-7_7
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