IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Formal-Informal Sectors¡¯ Conflict: A Structuralist Framework For India

Listed author(s):
  • Saumya Chakrabarti


    (Department of Economics and Politics, Visva-Bharati University)

  • Anirban Kundu


    (Centre for Development Studies, Trivandrum)

Registered author(s):

    The vast informal sector of the developing world in general and of India in particular is increasingly considered as a ¡®dispersed development engine¡¯ by the orthodox schools. It is also argued, though sizeable portion of informal sector exists independent of formal sector, a large segment bears a complementary relationship with these formal productions. However, on the contrary we propose a fundamental conflict between the two sectors given the generic food-supply-constraint. To analyse such a proposition we construct a multi-sector macroeconomic framework and also show that agriculture-formal sector interaction is distinctly different from agriculture-informal sector linkage. Next, we examine the impacts of variations in agricultural productivity and that of fiscal policy changes on this formal-informal conflict. In the first case of increasing agricultural productivity while both formal and informal sectors expand, the former benefits proportionately more than the latter. In the second case of expansionary fiscal policy the informal sector expands even at the cost of contraction of the formal one.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 34 (2009)
    Issue (Month): 2 (December)
    Pages: 27-67

    in new window

    Handle: RePEc:jed:journl:v:34:y:2009:i:2:p:27-67
    Contact details of provider: Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Ranis, Gustav & Stewart, Frances, 1993. "Rural nonagricultural activities in development : Theory and application," Journal of Development Economics, Elsevier, vol. 40(1), pages 75-101, February.
    2. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
    3. Amit Bhaduri, 2003. "Effective demand and the terms of trade in a dual economy: a Kaldorian perspective," Cambridge Journal of Economics, Oxford University Press, vol. 27(4), pages 583-595, July.
    4. Gerry, Chris, 1978. "Petty production and capitalist production in Dakar: The crisis of the self-employed," World Development, Elsevier, vol. 6(9-10), pages 1147-1160.
    5. Kaldor, Nicholas [Lord], 1976. "Inflation and Recession in the World Economy," Economic Journal, Royal Economic Society, vol. 86(344), pages 703-714, December.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:34:y:2009:i:2:p:27-67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sung Y. Park)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.