Informal Sector: Progression or Persistence? A Study of Four Traditional Clusters of West Bengal, India

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 unorgan ised/informal manufacturing units engaged in iron forging and fabrication and in handloom weaving. We have tried to understand these tendencies focusing on vari ous 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 (Bard han 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, over whelming 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).