Market development of informal services sector with formal sector linkages in India
15 Apr 2019-Journal of Management and Research (Ip Innovative Publication Pvt. Ltd.)-Vol. 6, Iss: 1, pp 30-35
TL;DR: In this article, the authors analyse variables affecting development of market for services in informal or unorganized sector and analyse the changes taking place in Indian economic policy and technology environment presently in the direction of formalization needs to be examined.
Abstract: Objective of this study is to analyse variables affecting development of market for services in informal or unorganized sector. The extant literature studies informal sector from view point of manufacturing enterprises, emergence of informality and urbanization with migration of labour from primary activities and challenges of dualism of urban and rural as well as formal and informal employment resulting in income disparities. The services sector which is now a bigger contributor to economic growth in India as also in developed economies mainly discusses tradable services in formal enterprises and its linkages with informal sector. There is a large space remaining uncovered of personal and household services and human development services where infrastructure support and intervention from public and private institutions could upgrade services offered and provide marketability to the sector. The changes taking place in Indian economic policy and technology environment presently in the direction of formalization needs to be examined. Services in informal sector have an important bearing on human capital and social capital development.
Keywords: Formal and informal sector linkages, Non-tradable services, Social capital, Human development.
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TL;DR: In this article, the authors present a different framework for solving problems of distribution accumulation and growth first in a closed and then in an open economy, where the assumption of an unlimited labor supply is used.
Abstract: Written in the classical tradition this essay attempts to determine what can be made of the classical framework in solving problems of distribution accumulation and growth first in a closed and then in an open economy. The purpose is to bring the framework of individual writers up to date in the light of modern knowledge and to see if it helps facilitate an understanding of the contemporary problems of large areas of the earth. The 1st task is to elaborate the assumption of an unlimited labor supply and by establishing that it is a useful assumption. The objective is merely to elaborate a different framework for those countries which the neoclassical (and Keynesian) assumptions do not fit. In the 1st place an unlimited supply of labor may be said to exist in those countries where population is so large relative to capital and natural resources that there are large sectors of the economy where the marginal productivity of labor is negligible zero or even negative. Several writers have drawn attention to the existence of such "disguised" unemployment in the agricultural sector. If unlimited labor is available while capital is scarce it is known from the Law of Variable Proportions that the capital should not be spread thinly over all the labor. Only so much labor should be used with capital as will reduce the marginal productivity of labor to zero. The key to the process of economic expansion is the use that is made of the capitalist surplus. In so far as this is reinvested in creating new capital the capital sector expands taking more people into capitalist employment out of the subsistence sector. The surplus is then larger still and capital formation is still greater and so the process continues until the labor surplus disappears. The central problem in the theory of economic development is to understand the process by which a community which was previously saving and investing 4 or 5% of its national income or less converts itself into an economy where voluntary saving is running at about 12-15% of national income or more. This is the crucial problem because the central fact of economic development is rapid capital accumulation (including knowledge and skills with capital). Much of the plausible explanation is that people save more because they have more to save. The model used here states that if unlimited supplies of labor are available at a constant real wage and if any part of profits is reinvested in productive capacity profits will grow continuously relative to the national income and capital formation will also grow relatively to the national income. As capitalists also create capital as a result of a net increase in the supply of money particularly bank credit it is necessary to take account of this. Governments affect the process of capital accumulation in many ways and not least by the inflations which they experience. The expansion of the capitalist sector may be stopped because the price of subsistence goods rises or because the price is not falling as fast as subsistence productivity per head is rising or because capitalist workers raise their subsistence standards.
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Abstract: The world's most exciting, fastest-growing new market? It's where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense entrepreneurial capabilities and buying power. You can learn how to serve them and help millions of the world's poorest people escape poverty.It is being done-profitably. Whether you're a business leader or an anti-poverty activist, business guru Prahalad shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets.In the book and accompanying CD videos, Prahalad presents...Why what you know about BOP markets is wrong A world of surprises-from spending patterns to distribution and marketingUnlocking the "poverty penalty"The most enduring contributions your company can make Delivering dignity, empowerment, and choice-not just productsCorporations and BOP entrepreneurs Profiting together from an inclusive new capitalism "C. K. Prahalad argues that companies must revolutionize how they dobusiness in developing countries if both sides of that economic equation areto prosper. Drawing on a wealth of case studies, his compelling new bookoffers an intriguing blueprint for how to fight poverty with profitability." Bill Gates, Chairman and Chief Software Architect,Microsoft "The Bottom of the Pyramid belongs at the top of the reading list forbusiness people, academics, and experts pursuing the elusive goal ofsustainable growth in the developing world. C. K. Prahalad writes withuncommon insight about consumer needs in poor societies andopportunities for the private sector to serve important public purposes whileenhancing its own bottom line. If you are looking for fresh thinking aboutemerging markets, your search is ended. This is the book for you." Madeleine K. Albright, Former U.S. Secretary of State "Prahalad challenges readers to re-evaluate their pre-conceived notionsabout the commercial opportunities in serving the relatively poor nations ofthe world. The Bottom of the Pyramid highlights the way to commercialsuccess and societal improvement--but only if the developed worldreconceives the way it delivers products and services to the developingworld." Christopher Rodrigues, CEO, Visa International "An important and insightful work showing persuasively how the privatesector can be put at the center of development, not just as a rhetoricalflourish but as a real engine of jobs and services for the poor." Mark Malloch Brown, Administrator, United Nations Development Programme
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TL;DR: In this article, the authors studied the economic activities of the low-income section of the labour force in Accra, the urban sub-proletariat into which the unskilled and illiterate majority of Frafra migrants are drawn.
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"Market development of informal serv..." refers methods in this paper
...…the formal economy by either process of Journal of Management Research and Analysis, January-March, 2019;6(1):30-35 32 co-production or outsourcing (Ostrom 1996).22 The section of formal sector which benefits from economic linkages outsource the part of their operation to informal sector units for…...
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821 citations
"Market development of informal serv..." refers background in this paper
...Whereas Moser (1978);17 Portes et al (1989)23 suggest that informal enterprises are subordinated to formal units in a structure of industry or services where scope exists for informal sector to play second fiddle to formal enterprise for the reason of factor efficiency and cost control to meet…...
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