The Modi Sarkar’s Project for India’s Informal Economy -Barbara Harriss-White

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published Published on May 20, 2020   modified Modified on May 21, 2020

-TheWire.in

From demonetisation to GST and now the lockdown, the government's policies towards the 'unorganised sector' has spelt nothing but rack and ruin.

What has the BJP-led government of Narendra Modi done since 2014 that does not suggest it wishes to destroy the informal economy, also known as the unorganised sector?

While the ‘unorganised’ informal economy now accounts for roughly half of India’s GDP – and is shrinking relative to the share of the private and public corporate sector – it accounts for 80-90 % of the workforce. It includes agriculture, despite the fact that land titles are registered, except for plantations, which are regarded as ‘organised’ despite their unravelling workforces. But it also includes most of the rural non-farm economy and the vast services sector, from high-end to low-end, the manufacturing labour force, workshop industry and trade.

While there is no comprehensive data, and we have to extrapolate from surveys and case studies which involve a multitude of inconsistent concepts and terms, we do know it is very large, absolutely and relatively, compared with other low-middle income countries. Its size is distinctively Indian.

The informal economy drives growth and livelihoods. It supplies labour-intensive exports. It provides the goods and services that COVID-19 reminds us are essential. Its costs and returns provide the structure of costs and prices for the rest of the economy.  India’s comparative advantage relies on it. Labelled ‘unorganised’, it is far from disorganised: it is organised through business associations, unions and the identities of caste, ethnicity, religion and gender. The founding fathers thought these distinctions would gradually disappear but over time they have mutated and actually strengthened. Some sectors and regions are also ordered through mafia clans.

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TheWire.in, 20 May, 2020, https://thewire.in/political-economy/the-modi-sarkars-project-for-indias-informal-economy


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