The pandemic and the informal sector of India

Abstract

The spectre of Covid-19 and the nation-wide lockdown have threatened the very existence of the large informal sector of India. In this context, we undertake a study with two objectives. First, we examine the extent of vulnerability with probable job losses across the informal sector and some of its immediate economic consequences. Subsequently, the study proposes a strategic intervention in the informal sector with a series of short-, medium- and long-run measures. While the short-run measures emphasize providing food via various means, the medium-run interventions are intended to sustain livelihood through un/conditional cash transfers. The study argues analytically that such food and cash transfers could be undertaken maintaining macroeconomic balance and these processes could have long-run implications too. Finally, we advocate for a long-run strategy of forming/inducing clusters of informal firms: Either physically for manufacturing or virtual clustering for services. Clusters could act as collectives having synergic effects, despite being governed by the principles of private ownership, and could offer the tiny enterprises an edge in handling their conflicts and complementarities with the global capital. © 2022 selection and editorial matter, Rajib Bhattacharyya, Ananya Ghosh Dastidar and Soumyen Sikdar;individual chapters, the contributors.