Hostname: page-component-848d4c4894-8kt4b Total loading time: 0 Render date: 2024-07-01T14:12:25.691Z Has data issue: false hasContentIssue false

The formal–informal dichotomy: Revisiting the debate on the agriculture–industry linkage

Published online by Cambridge University Press:  01 January 2023

Saumya Chakrabarti*
Affiliation:
Visva-Bharati Santiniketan, India
*
Saumya Chakrabarti, Associate Professor of Economics and Honorary Director, Agro-Economic Research Centre, Visva-Bharati University, Santiniketan, 731235, India. Email: saumya.chakrabarti@visva-bharati.ac.in

Abstract

Incorporation of the informal sector in the general Kaleckian framework of agriculture–industry linkage is the primary target of this article. We show that the agriculture–informal sector interaction is distinctly different from the agriculture–formal sector relationship. Although agriculture supports the formal sector only from the supply-side, it helps the informal sector by providing both demand- and supply-side inducements. Next, contrary to the general perception of formal–informal complementarities, we rather propose a fundamental conflict. This conflict arises in the presence of the food supply-constraint or the generic resource-constraint. Subsequently, with these theoretical perspectives, we show that policies that are beneficial for the formal sector, in fact, constrict the informal economy.

Type
Non-Symposium Articles
Copyright
© The Author(s) 2013

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bandyopadhyay, R (2009) Hawkers’ movement in Kolkata, 1975–2007. Economic and Political Weekly 64(17): 116119.Google Scholar
Bangasser, PE (2000) The ILO and the informal sector: an institutional history. ILO employment paper (Informal Economy Resource Database), Geneva. Available at: http://www.ilo.org/ (accessed 24 October 2013).Google Scholar
Batini, N, Kim, Y, Levine, P, et al . (2011) Informal labor and credit markets: A survey. Working paper no. 2011-94, November. New Delhi, India: National Institute of Public Finance and Policy.Google Scholar
Bhaduri, A (1986) Macroeconomics: The Dynamics of Commodity Production. New Delhi, India: Macmillan.CrossRefGoogle Scholar
Bhaduri, A, Skarstein, R (2003) Effective demand and the terms of trade in a dual economy: a Kaldorian perspective. Cambridge Journal of Economics 27(4): 583595.CrossRefGoogle Scholar
Bose, A (1989) Short period equilibrium in a less developed economy. In: Rakshit, M (ed.) Studies in the Macroeconomics of Developing Countries. New Delhi, India: Oxford University Press, pp. 2641.Google Scholar
Chakrabarti, S (2001) Agriculture-industry relation: aggregate demand, supply constraint and the concept of ‘domestic exports’. In: Acharyya, R, Moitra, B (eds) Effects of Globalization on Industry and Environment. New Delhi, India: Lancer Books, pp. 191210.Google Scholar
Chakrabarti, S (2009) Contradictions of ‘doing development’: a structuralist framework. American Review of Political Economy 7(1–2): 136.Google Scholar
Chakrabarti, S (2011) A macroeconomic structure of employment: rural-urban conflict in a Kaleckian framework. Review of Radical Political Economics 43(2): 172197.CrossRefGoogle Scholar
Chakrabarti, S, Kundu, A (2009) Formal-informal sectors’ conflict: a structuralist framework for India. Journal of Economic Development 34(2): 2767.CrossRefGoogle Scholar
Chakravarty, S (1977) Reflections on the growth process in the Indian economy. In: Chakravarty, S (ed.) Writings on Development. New Delhi, India: Oxford University Press, pp. 207236.Google Scholar
Chatterjee, P (2008) Democracy and economic transformation in India. Economic and Political Weekly 19: 5362.Google Scholar
Harvey, D (2003) The New Imperialism. Oxford and New York: Oxford University Press.CrossRefGoogle Scholar
Hymer, S, Resnick, S (1969) A model of an agrarian economy with non-agricultural activities. American Economic Review 59(4): 493506.Google Scholar
Kaldor, N (1996 [1984]) The problem of intersectoral balance. In: Kaldor, N (ed.) Causes of Growth and Stagnation in the World Economy (Mattioli Lectures). Cambridge: Cambridge University Press, pp. 3954.CrossRefGoogle Scholar
Kalecki, M (1971 [1934]) On foreign trade and domestic export. In: Selected Essays on the Dynamics of the Capitalist Economy. Cambridge: Cambridge University Press.Google Scholar
Kalecki, M (1993 [1954]) The problem of financing economic development. In: Osiatynski, J (ed.) Collected Works of Michal Kalecki, vol. 5. Oxford: Clarendon Press, pp. 4560.Google Scholar
Lanjouw, JO, Lanjouw, P (2001) The rural non-farm sector: issues and evidence from developing countries. Agricultural Economics 26(1): 123.CrossRefGoogle Scholar
Lenin, VI (1972 [1899]) The Development of Capitalism in Russia (Collected Works), vol. 3 Moscow: Progress Publishers.Google Scholar
Lewis, WA (1958 [1954]) Economic development with unlimited supplies of labor. In: Agarwala, AN, Singh, SP (eds) The Economics of Underdevelopment. New Delhi, India: Oxford University Press, pp. 400449.Google Scholar
Marx, K (1958) Capital, vol. I. Moscow: Foreign Languages Publishing House.Google Scholar
Mellor, JW (1976) The New Economics of Growth – A Strategy for India and Developing World. New York: Cornell University Press.Google Scholar
National Sample Survey Organisation (NSSO) (2001) Informal sector in India 1999–2000: Salient features. NSS 55th round (July 1999–June 2000). Report no. 459 (55/2.0/2), May. New Delhi, India: NSSO.Google Scholar
National Sample Survey Organisation (NSSO) (2002) Unorganised manufacturing sector in India 2000–2001. Key results. NSS 56th round (July 2000–June 2001). Report no. 477 (56/2.2/1), September. New Delhi, India: NSSO.Google Scholar
Preobrazhensky, E (1965 [1926]) The New Economics. Oxford: Clarendon Press.Google Scholar
Raj, KN (1976) Growth and stagnation in Indian industrial development. Economic and Political Weekly 11: 223236.Google Scholar
Rakshit, M (1982) The Labor Surplus Economy. New Delhi, India: Macmillan.Google Scholar
Ranis, G, Fei, JCE (1961) A theory of economic development. American Economic Review 51(4): 533565.Google Scholar
Ranis, G, Stewart, F (1993) Rural non-agricultural activities in development: theory and application. Journal of Development Economics 40(1): 75101.Google Scholar
Ranis, G, Stewart, F (1994) V-goods and the role of the urban informal sector in development. Centre discussion paper no. 724. New Haven, CT: Economic Growth Centre, Yale University.Google Scholar
Ricardo, D (1815) An essay on the influence of low price of corn on the profits of stocks. In: Sraffa, P (ed.) Works and Correspondence of David Ricardo, vol. 1. Cambridge: Cambridge University Press, pp. 110127.Google Scholar
Saith, A (1991) Asian rural industrialization: context, features and strategies. In: Breman, J, Mundle, S (eds) Rural Transformation in Asia. New Delhi, India: Oxford University Press, pp. 458489.Google Scholar
Sakthivel, S, Joddar, P (2006) Unorganised sector workforce in India: trends, patterns and social security coverage. Economic and Political Weekly 27: 21072114.Google Scholar
Sanyal, K (2007) Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post Colonial Capitalism. New Delhi, India: Routledge.Google Scholar
Sanyal, K, Bhattacharyya, R (2009) Beyond the factory: globalisation, informalisation of production and the new locations of labour. Economic and Political Weekly 44(22): 3544.Google Scholar
Taylor, L (1983) Structuralist Macroeconomics. New York: Basic Books.Google Scholar
The Indian Express (2013) Indian economy will pick up by year-end: Raghuram Rajan. The Indian Express, 16 October. Available at: http://www.indianexpress.com/news/indian-economy-will-pick-up-by-yearend-raghuram-rajan/1183306/ (accessed 2 November 2013).Google Scholar
World Commission on the Social Dimension of Globalisation (2004) A fair globalization: creating opportunities for all. Report of the Director-General on the World Commission on the Social Dimension of Globalisation, International Labour Organisation, Geneva, February.Google Scholar