Income Distribution and Effective Demand in the Indian Economy

Zico Dasgupta, July, 2020

Does there exist a trade-off between labour’s income share and output growth rate? Or does a reduction in wage share in itself reduces the output growth rate? These questions have returned to the centre stage in the midst of India’s present crisis as the government sought the dilution and suspension of labour laws as a counter-cyclical policy instrument. In the absence of any other stimulus or countervailing factors, the impact of such a policy would hinge on the relationship between income distribution and effective demand. This paper attempts to lay bare this relationship for the Indian economy through an empirical analysis of India’s macro data and a theoretical model on the basis of regression results.

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What Explains India’s High Growth Phase? Investment, Exports and Growth During the Liberalization Period

Zico Dasgupta, January, 2020

The Indian economy embarked upon a higher growth trajectory during the period of economic liberalization particularly due to high growth rate of output and investments during the 2000s as compared to the earlier period. But was it on account of implementation of liberalization policies per se, or was it primarily on account of factors which were exogenous to domestic policies? This paper argues the latter and attempts to provide an explanation of India’s growth story from the demand-side framework by highlighting its external dependence for keeping up the growth rate. Despite deterioration in net exports, it is argued that it was primarily the exogenous changes in the level and pattern of global demand which led to an increase in India’s corporate investments and output during the relevant period. One key conclusion which can be drawn from this analysis is that the objective of attaining high domestic output growth rate cannot be met in the present situation of weak global demand simply by repeating the strategies that were once implemented during the high growth phase.

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The focus of the research is the work and lives of ‘Domestic workers’ (henceforth, DW) in Bangalore, especially their struggles to form collectives as part of their attempt to transform their subjectivities from ‘servant’ to ‘worker’, and improve their life and work situations. Domestic work is precarious work constituting a large part of India’s informal economy. It exists within a political economic context signaled by rising incomes of urban middle and upper classes and the existence of a steady supply of working-class women (from mostly stigmatized castes but across all religions) ready for domestic work. It is also enabled by a cultural-ideological context signaled by the preference to engage DWs as a normalized cultural marker for upward mobility. Our research demonstrates the struggles of DWs, the dilemmas and obstacles they negotiate for their empowerment. It focuses on the collective actions of DWs in their workplaces, their families and neighborhoods, and within unions and labour-NGOs engaged in organizing DWs for “formalization” of work, demands for a ‘decent’ wage and work conditions, and innovations in the form and content of their collective rights.

Domestic Work is Work: an illustrated booklet

A summary of our research can be found in the form three main demands as illustrated in the 4-page pamphlet. Download the file here.

Domestic Work is Work: an interactive session

On International Domestic Workers' Day (16th June, 2020), Rajesh Joseph was joined by Geetha Menon (Stree Jagruti Samiti), Usha Ravikumar (FEDINA), and Balmurli Natarajan (Visiting Faculty, Azim Premji University) to discuss various issues regarding domestic workers' rights and dignity of labour. Watch the video here.