In this dissertation, I present a Marxian analysis of class qua surplus in the informal manufacturing sector in India. I develop a framework to account for processes of production, appropriation, and distribution of surplus labor in informal enterprises, and apply this framework to analyze the disaggregated, unit-level data from National Sample Survey (62nd round, 2005-06). I show that the informal manufacturing sector is a site of heterogeneous class processes, encompassing capitalist, feudal, and ancient appropriative class processes.
I further show that, under the given market wage rates and the corresponding living standards for informal sector workers, the enterprises (both capitalist and noncapitalist) are capable of producing, appropriating and realizing surplus. I calculate the magnitude and rate of surplus value for enterprises with different appropriative class processes. The average amount of surplus produced and the rate of exploitation in the informal capitalist enterprises are substantially higher than in the noncapitalist enterprises. The noncapitalist–primarily “ancient”–enterprises, however, cannot retain any significant amount of net surplus for expanded reproduction and growth. Thus, the capitalist and noncapitalist spaces within informal manufacturing sector can be clearly delineated in terms of their capacity for realization and accumulation of surplus.
The noncapitalist informal enterprises provide livelihood to much of the surplus population in India who are not absorbed into the formal capitalist sector. I show that the owners/workers of these enterprises have to subsist, on average, much below the customary standard of living for wage-workers in India. This difference between the notional (based on minimum wages) and the actual standard of living demonstrates high incidence of relative poverty among the surplus population. The unity of the direct producers with their means of labor ensures the basic survival of the informal household enterprises. I show that even if these households retain the net surplus or net profit to augment their consumption funds, and not for accumulation, they still will not be able to attend the customary standard of living, and will continue to be in relative poverty.