The Nonfarm Economy

Abstract The Indian economy has been undergoing a transformation for the past several decades. The dominant discourse views this transformation as a progression towards a grand, unified, and dynamic market economy. This book critiques this discourse and illustrates in detail the prevalence and also intensification of ‘structural dualism’. It analyses, theoretically as well as empirically, the origins of this persistence and deepening of dualistic developmental pattern. This study of the Indian rural economy and parts of the rural Global South shows that the contemporary capital-centric growth process itself is inducing the intensification of dualism, along with other important factors like population growth and land fragmentation. The growth mechanism produces various shocks, especially the price/cost shocks, in the short and medium term that cause dispossession of a significant portion of the population. Only a limited segment of this impoverished population can integrate itself with the expanding circuits of capital, owing to their skills, resources, and networks, but a very large mass of people is pushed towards exclusion. The book further examines the effects of the COVID-19 pandemic (which severely disrupted the capital accumulation process) on this development pattern. The analysis suggests that COVID and the post-COVID situation have intensified the phenomenon of structural dualism. The book concludes with constructive policy recommendations for achieving inclusive growth. The recommendations extend beyond the current dominant prescriptions that are obsessed with formal sector growth and with policies extending government support. The authors, on the contrary, posit a labour-focused (cluster-based) development model.