the informal sector

Most of the migrants in Mumbai are part of the city's informal labor force.  As I've been talking to NGO workers, professors and family members over the last few days, I've heard lots of facts and thoughts on the informal sector... I want to jot down some of the stuff I found the most interesting.

The informal sector is "under-the-table," outside of government regulation.  In a way, the people who constitute it are kind of outsiders in the city, not integrated into the formal economy, not paying taxes or official rents and often living in ad hoc and unsanitary settlements.  They also do not have labor rights or the same private property and residence rights that are typical in the formal sector.  I think that this situation is particularly unstable for them because in the political climate of today, they are also portrayed as cultural outsiders by certain political parties.  And the direction of local and state government policies seems to be making it harder, not easier, for them to formalize their residences and livelihoods in the city.

Despite a status that seems temporary, many of them have lived in Mumbai for all or most of their lives and their presence and economic activities are indispensable.  Most of my own food and transportation needs here are met by the informal sector.  And they do pay "rents" (in the form of bribes) to government officials and landlords.   If they live in a "declared slum," then the government is responsible for ensuring they have access to city services like electricity and water.  But if they are in an undeclared slum, they do not have these things, or they get them through bribes and backdoor channels.

Informal sector activities include a truly huge array of things.  All of the hawkers that sell various things in carts on the street (hawking is illegal), food vendors, waste removal workers, maids, cooks and other household workers, clothes makers, construction workers (who are hired by subcontractors and paid in cash), cab and rickshaw drivers, and the endless number of people that you can hire for all sorts of small jobs... all of these are part of the informal sector.  Even factories-- like many places in the Dharavi slum that produce snacks, leather, buckles, garments-- are informal because they occupy their land unofficially by paying bribes to government officials, and always face the threat of destruction to make room for more upscale development. 

To give me an idea of the scale of production that falls into this sector, Indira (my new friend from LEARN India) told me that there are about 50 farsan (snack) factories in Dharavi alone, and they produce about 50,000 kgs (110,000 lbs) of food per day that goes into Mumbai.  This is a low estimate... its more when there is a major event or festival.  Its clear that the informal sector is critical for meeting the city's demand for consumption.  (By the way, the term "factory" may be a bit misleading here... they are called factories, but a better way to describe them would be large clusters of small scale, labor intensive production.  For example, a garment factory is likely to be several men who sit at sewing machines in small cement structures... more like sweat shops).

When we were talking about hawkers, Indira said that she thinks the very informality of the informal sector makes small human connections more possible and reduces the alienation people feel in a big city.  She said that besides its obvious economic value, the informal sector is also important  because it keeps a certain level of sanity and personal contact in society.  For example, the experience of going to a bazaar and bargaining for an item forces you to talk to people, engage with them, and even use a bit of charm.  Formal businesses, with no space for haggling, also leave little space for extended personal interaction.  She thinks thats one of the reasons that in era of supermarkets and department stores, things like local bazaars and farmers' markets are again popular in the West. 

The pictures are of a girl selling hair clips on a train, and a line of informal shops on the side of a street: