Contemporary Formal-Informal Dichotomies: An Exploratory Essay Based on Evidence from Tamil Nadu, Southern India
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Orthodox explanations for the nature and persistence of the urban informal economy in the global South have ranged from acting as a waiting room for entry into the formal to being constituted through excessive state regulation. Neo-Marxist accounts explain it as an economy reproduced by modern capital to subsidise the costs of reproduction, or more recently a governmental move to address the concerns of populations dispossessed from the rural means of production, but redundant to capital. Without undermining the partial validity of some of the explanations, I argue in this essay that such accounts are inadequate to understand and explain the growing processes of informality in late-urbanising and globalising economies like India. Furthermore, there is a need to move away from a dualistic understanding of formal-informal distinctions and instead evolve appropriate typologies of the informal focusing on processes generating informality and the segment’s links to the domain of capital accumulation. The paper therefore makes a case for moving away from theorizing at the level of the nation-state to more intermediate spatial scales like the region or city on the one hand and an explicit recognition of sectoral specifities on the other. Such an empirically grounded exercise is important for conceptualization of the multiple processes generative of informal economies. It would also help to capture the diversity of informality generated across regions and sectors and hence open up a more enabling reading of the processes at work.
This is a revised version of a paper presented by the author at the INDAS International Conference titled ‘Actualities of Indian Economic Growth at Rural-Urban Crossroads’, held during December 15–16, 2012, at the University of Tokyo, Tokyo.
Journal of Urban and Regional Studies on Contemporary India
The Center for Contemporary India Studies, Hiroshima University
(c) 2019 The Center for Contemporary India Studies, Hiroshima University