Abstract

Contrary to the conventional belief of diminishing presence of informal entities in a more globalized world, there has been an upsurge in the size of the informal economy in the recent decades. The article summarizes the factors behind the existence and persistence of such economy and explains the advantages of the informal economy in reducing transaction costs, in sidestepping the bureaucratic obligations, and in complementing the formal economy. The paper refutes the idea that the informal firms act as a weak substitute for the formal firms. The paper uses anecdotal evidence and highlights the linkages between the two sectors. We take off from the recent critiques of precarity as an emerging global phenomenon to argue that the processes of precarity in the Global North and the Global South need to be analytically distinguished to bring forth their specificities. We further argue that such an analysis challenges the idea of development as transition, as is prevalent in much of the literature. We focus on the informal economy in India to show that the notion of precarity conceptually involves three distinct aspects of production and labour processes��non-capitalist� petty commodity production (PCP), subcontracted PCP, and informal wage-labour. We argue that these dimensions have their own particularities that have distinct implications for the process of capitalist development in India. We contend that reproduction of these informal spaces during a period of high economic growth unsettles the imaginary of development as transition.

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