mong India’s workforce of about 470 million people, 93 per cent, or over 430 million, work in the so-called informal economy, with no protection against arbitrary dismissal, accidents and other risks, and no access to pensions, healthcare, or any other form of social security. They also generate over two thirds of the country’s GDP, but on 2005 figures 77% of India’s total population lived on Rs. 20 a day or less; that was before the global slump. Jan Breman sums up his four decades of meticulous fieldwork in a clearly structured book with a comprehensive 150-page analysis preceding 10 reprints from the author’s earlier and often seminal papers, and in the process he exposes several fallacies.
The first is that of the formal-informal dichotomy; even in supposedly formal employment, few workers belong to trade unions; as Breman has also shown in earlier work, recruitment is often done by intermediaries, who appoint on caste or other lines. One half of all workers in such jobs have no security and can be sacked instantly. Furthermore, informal labour provides a vast amount by way of goods and services for consumers in formal employment, and those in the informal sector consume goods produced in formal work. Moreover, organised businesses systematically avoid labour, health and safety, and environmental regulations, not to mention tax law, by transferring business activities and production to the informal sector; these capitalist imperatives pervade the entire economy. Furthermore, the linking of domestic production and services with those in other countries now means that the global slump hits the poorest and most defenceless in India hardest, as Barbara Harriss-White has also noted.
Another fallacy is that of self-employment, which in fact means waged labour on crushingly oppressive terms. The supposedly self-employed include street vendors, who are “easy prey” for the police, sex workers hawked around by their pimps, home-based workers or stallholders permanently in debt to suppliers and agents, and the like. Piecework rates are set by employers; rickshaw drivers have to hand over most of their earnings to the owners of the vehicles (which may be illegally operated by various officials or politicians anyway), and slack days mean indefinitely long working hours.
A third fiction is the rural-urban divide. Up to 100 million are seasonal migrants, landless agricultural workers escaping seasonal starvation by looking for work in cities. Kept permanently on the move by jobbers and brokers, they are sacked at the first sign of illness or infirmity. Urbanisation means neither industrialisation nor stability, and urban areas have never been social melting-pots; neighbourhoods are often rigidly defined by caste and other faultlines. There is no identifiable urban Indian working class, and – unlike the poor of 19th century Europe - third-world migrants cannot emigrate en masse if indeed at all. In addition, regionalism makes migrant workers very vulnerable; unable to speak local languages or give a local address, aliens in their own republic, they are easy targets for the unscrupulous and the bigoted.
The key division, then, is between even moderate security of employment and none at all. Those who have the former benefit immeasurably more than the rest, who are the overwhelming majority. Yet the World Bank claims that labour-protection laws are “onerous”, and says the apartheid between the secure and the insecure must be abolished by total casualisation.
In India, the sheer scale of employment insecurity shows the state’s inability or unwillingness to regulate capital; now, progressive informalisation of all work is part of the transition to unregulated capitalism. It follows that the accumulation and circulation of capital beyond the ken and reach of the state are much less well researched than the origin, composition, flow, and control of labour. The elites do not mention that the policy remains a colossal failure; the growth-rate of employment declined between 1993 and 2005, as did that of wages and average earnings, and any increase in employment has been “almost entirely” among low-wage workers. The labour-force participation rate has also fallen, in a form of jobless growth.
Yet hardline proponents of neoliberalism insist, almost delusionally, that informality is a safety-net, despite all the evidence that the economy’s absorptive capacity is severely limited by the lack of non-agrarian work in rural areas. A “floating army” of the jobless fills the daily-wage markets, which are in effect slave-auctions, and the National Rural Employment Guarantee Scheme has not stemmed the “swelling tide” of seasonal migration, because it does not create local jobs improving the physical and institutional infrastructure. Even the jobbers and brokers who recruit workers get trapped, because the owners often pay them so late that they have to borrow from informal lenders if they are to recruit the best workers.
The processes are clearest in Gujarat, where even the idea of a contract often disappears; workers are so destitute that they need advance payment and end up in what Breman calls neo-bondage. That eliminates even feudal obligations and reduces the worker to nothing but an abstract unit of temporary labour power. Officialdom keeps quiet; the subversion of the state may even have started among politicians and bureaucrats. For example, the city of Surat is therefore “swamped with a floating mass” outside the state’s coverage; it is a “macho milieu” polluted by fumes, noise, stench and filth, and pervaded by drunkenness, homosexual and heterosexual abuse, and violence, not least towards women. The young men who populate it were ready instruments for those who whipped up the communal slaughter of the early 1990s; Michael Fathers wrote in the Independent 20 years ago that raw capitalism and traditional prejudices make a deadly mixture. Breman’s reprinted paper describes unspeakable conditions in the factories and tenements, where exhausted men collapse into beds just vacated by those starting the next shift. As for rural work, it is of necessity exposed to the elements; Breman says that even in a short time on salt pans where people toiled all day, the ferocious glare made his eyes red-rimmed and sore.
The growing divide between the language of market economics and that of citizenship has at least led politicians to offer basic goods like foodgrains at low prices, but these are usually vote-buying sops. If there is hope, it is that citizens know their condition; as one cane-cutter told officials, mill management treated workers so badly that “Even dogs are better off.” Meanwhile, India’s political economy continues to be neither the political economy of hell nor one from hell. It could well be Hades itself.
( Arvind Sivaramakrishnan is a senior deputy editor with The Hindu )