Development economics and the colonial encounter: Informality, caste, and postcolonial capitalist development in India

This article posits the contradictory relation between capitalist and non-capitalist segments of an economy as a key dimension of the colonial encounter and as a critical and constitutive element in the contemporary process of postcolonial capitalist development. It points to the obfuscation of this contradiction in the prevalent theoretical approaches in development economics, particularly focusing on the discourse on informal economy and the role of identity. It then foregrounds an emerging theoretical framework on postcolonial economic dynamics — and its key methodological tenets — that frames the development process as being marked by this on-going and ever-occurring contradiction. The article, however, highlights a key gap in this framework to grapple with the role of identities in these development dynamics, and points to some critical methodological approaches to identity that may be productively integrated to further develop it. Finally, the article provides empirical illustrations from the Indian context that underscores the constitutive role of caste in shaping both the reproduction of non-capitalist informal enterprises that sustain the working populations excluded from the capitalist segments, as well as the selective inclusion of parts of this population into capitalist segments as informal wage labor — processes that can be generatively interpreted through the above theoretical framework. Through this intervention, the article aims to clear grounds towards formulating a pathway to build a decolonized approach to contemporary processes of economic development.