THE ROLE OF THE CASUAL POOR IN A THIRD WORLD URBAN ECONOMY: A CASE STUDY OF CALCUTTA, INDIA (INFORMAL SECTOR)

The basic aim of this research is to examine the conjecture that the linkages between the non-industrialized sector and the modern sector in the Third World result in a net transfer of value from the non-industrialized sector. The presence of these sectors is most strikingly illustrated in the urban economy of the Third World where a small, modern sector exists side by side with a much larger non-industrialized sector. The research is based on a field survey of 135 slum households in Calcutta, India. The data provide the basis for a rich descriptive analysis of the working life of slum inhabitants, their migration histories, and labor market characteristics. Secondly, the data have been used for more rigorous statistical tests which indicate the existence of a lower strata among the slum population, that is, people with low and unstable incomes termed the casual poor. Using both primary data as well as secondary data, the research aims to answer the following questions: (i) to what extent do the casual poor serve as a source of undervalued labor for the modern sector; (ii) to what extent do the casual poor serve as a source of undervalued goods and services; and (iii) to what extent do the casual poor serve the welfare needs of the urban population. The analysis of data from Calcutta indicates that while the casual poor are a source of cheap labor, cheap wage goods, particularly clothing and house hold articles, and services, they are not alone in subsidizing the living costs of urban workers. The analysis indicates the increasing importance of the role of the state government in the provision of wage subsidies to the working class. However, in terms of transfers of value through unequal trade, the casual poor continue to play an important role.