ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Informal Sector in India

Competition or Collaboration?

Reviewing the vast literature on the informal sector in India, it is seen that competition, or lack of it, happens to be a crucial issue in analysing firm structure, market structure, and firm dynamics. The probable role of intra- and extra-firm collaboration in this context is largely under-researched
and is explored in this article.

The authors are indebted to the Indian Council of Social Science Research for the doctoral fellowship granted to the first author. The authors are also grateful to Anirban Kundu, Sarbajit Sengupta, Pratip Kumar Datta, and Kasturi Sadhu for their critical comments and thank Rahul Pal for his research support.

It is now well-accepted that the long-awaited Lewisian transformation (Lewis 1954) from traditional to modern economy in the global South has hardly taken place (Sanyal 2007). A very large segment of the population has been unable to capture the benefits of economic growth by being excluded from the formal capitalistic production-distribution processes (Moser 1978; Bhaduri 2017). And as a consequence, a large share of the workforce has been forced to depend on non-farm informal economic activities. The informal sector has thus become a crucial issue from the perspective of the development of the global South (ILO 2018). Earlier, it was thought that this sector would either wither away with growth or transform into a vibrant segment of emerging capitalism in the global South (La Porta and Shleifer 2014). But surprisingly, empirical evidence has revealed that instead of withering away, the informal sector is expanding along with economic growth in developing countries like India (Raj et al 2020; Bhattacharya and Kesar 2018). Hence, researchers and policymakers have been forced to take a serious interest in the non-farm informal sector.

There is vast global literature on the informal sector (Portes et al 1989; Bangasser 2000). Lately, the informal sector of India is also being studied rigorously (Marjit and Kar 2011; Breman 2013; Chakrabarti 2016; Raj and Sen 2016). Major writings have emerged on the extent and processes of inclusion or exclusion of this sector, its relationship with other sectors, its potential for growth, and possibilities of transformation (Sanyal 2007; Harriss-White and Sinha 2007; Marjit and Kar 2011; Gunther and Launov 2012; Breman 2013; Chakrabarti 2016; Raj and Sen 2016; Bhattacharya and Kesar 2018).

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

INR 59

(Readers in India)

$ 6

(Readers outside India)

Published On : 9th Mar, 2024

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.