The Informal Sector in India

Abstract

Is the informal sector in India a means of exploitation or a means of accumulation? One view takes the informal sector to be a site for primitive capital accumulation, with underpaid workers working in abysmal conditions. Another view takes the informal sector to be the venue for economic dynamism and entrepreneurial creativity. In this article, we evaluate these two views in relation to theories of the informal sector and empirical studies on India. We argue that both views have merit in the Indian context and accounts of the informal sector in India need to take into account the complexity and heterogeneity of production and labour relations that characterises the sector.