Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economic Research Unit (ERU-Kolkata)


Sarkar, Abhirup (ERU-Kolkata; ISI)

Abstract (Summary of the Work)

The concept of duali sm which has remained central to the study of the by of economic development, was first developed process Lewis(1954) and then further extended by Fel and Ranis(1966). Lewis concelved of a developing economy as one typically consisting of two sectors: a modern sector identified with industry, and a traditional sector identified with agriculture. Resources flow from the traditional to the modern sector whlle the process of development continues. As a consequence, the modern sector grows and the traditional sector shrinks. Some of the other development economists used other facets of dualism. Harris-Todaro(1970) explained the process of migration using the dualistic structure. Taylor (1979) and In this framework. The idea of informal sector primarily added an additional Rakshit (1982) incorporated the problem of sluggish demand dinension to the standard dualistic analysis. As the scope of empirical investigation widened, it was in most developing countries the Industrial sector itself had a dualistic structure. A large section of population was found to be employed outside the organized industrial sector. The wage structure, characteristics of labour, mode of operation of the production units etc were drastically different across the two classes sector was of organizations. Of the various names this residual with, informal sector provided by Hart (1973) vested the name stayed.The analysts of the informal sector found an interested audience among economists and policy makers. Interest was kindled mainly because the pace of economic growth in some developing countries was found to be insufficent to provide employment to the growing population within the organized sector. It was also inadequate to percolate the benefits of economic growth down to the poverty stricken mass. The informal sector became important because of its employment generating capacity and its supposed potential to alleviate poverty. It also dispelled is not employed in the organized necessarily unemployed or underemployed. However, the the misconception that whoever sector, is in development is still a matter of controversy. precise role played by the informal sector the process of The controversy arises because the activities of the informal sector are viewed in two different ways. According to one of the vlews, the very presence of the informal sector itself is indicator of insufficient an development. Its existence shows Inability of the organized sector to absorb the existing labour force. With economic progress and consequent growth of the organized sector, the informal sector will disappear. The other view considers the Infornal sector as a more long run feature on the economic profile of the LDCS, which can be and should be utilized for the purposes of economic development. Accordingly, the view demands that proper policies should be adopted to promote the growth and employment potential of this sector. The proponents of the second view point have gained ground, so much so that governments of neveral LDCS including India have started taking active Interest in the informal sector. We will come back to this point later again. For the moment, let us examine how far the understanding regarding the nature of the infornal sector activities and their place in the economic scenario have progressed.


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