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During the last two decades, India has experienced a high growth rate, but the contribution from productivity growth and technological progress has been very low. This has resulted in a poor performance in the employment generation in the formal sector, and this book examines this phenomenon and the Indian growth pattern. Using primary and secondary data, the book looks at the impact of economic reform on technological change and total productivity growth, and in turn its impact on the labour market. It examines the effect of trade reform on the form and functioning of labour m.

Workers in India are becoming increasingly precarious in spite of its significant economic growth during the past two decades. The extent of informalization and casualization, used as proxies for precariousness, can be deduced from government sources and shows that the size of the informal sector not only constitutes almost 90% of the working population but also is growing. While the informal sector is not an accurate measure of precarious work, two specific characteristics of Indian precarious work are highlighted. The first deals with nonregistered establishments, unmaintained accounts, and hiring no more than 10 workers, officially defined as the "informal sector." Individuals engaged in this sector experience precarious employment. The second group involves workers engaged in the formal sector on short-term contracts. Combined, the size of both types of precarious work has increased sharply in the postreform period beginning in the early 1990s. The supposed rigidity of labor laws is often used to explain the rise in precarious employment. However, the article finds that although the numbers of industrial disputes and wage shares have declined, the use of contract work has increased in the formal sector, and thus the labor market has been conducive to industrial expansion in spite of the absence of substantial labor law reform.

The article investigated the effect of foreign direct investment (FDI) on Indian exports using aggregate and disaggregate data to capture macro- and micro-channels. India registers a steady rise in FDI during 1980–2018 in absolute terms but not in terms of GDP share. At the aggregate level, FDI is found to have significantly influenced Indian exports (both manufacturing and services) during 1980–2018 by suppressing its adverse effect on currency appreciation. Even at the firm-level analysis using the World Bank Enterprise Survey database, it is evident that higher participation of foreign ownership, a proxy of FDI measure, seems to have encouraged their export decisions. However, more than 50% of the capital inflows are received from two three countries which is also on limited service-related activities. The lower FDI share on manufacturing has limited the export rise. JEL Codes: F16, L11

Despite the contentious success of the trade agreements, the island countries have still been vehemently negotiating further trade deals. This study explores the element which enhances trade flows for selected Commonwealth countries in the Caribbean and Pacific regions. The results suggest that income (gross domestic product) growth as significant support for trade flows, regional trade integrations of the Pacific and Caribbean are explained in its quiet dynamism, worth strengthening and further reforming. This study, by means of a comparative investigation of selected countries from within the Pacific and the Caribbean regions, proposes that the strategy for enhancing trade integration is creating demand for diversification in the region through greater regional integration. The estimates demonstrate that the level of diversification positively impacted the regions' bilateral export, having the Pacific region influenced almost twice as much like the Caribbean. Moreover, whilst understanding that the geographical location of the Caribbean already lets its states thrive through lower trading costs as compared to the Pacific, analysis in the study shows that the distance, remoteness and logistics difficulties inflate the price (or trade costs) limiting the success of regional trade agreements. JEL Classification: F13, F15

Sunk costs determine the level of productivity and exportability of a firm according to the modern trade theory. While productivity rise requires finance for innovation and technology adoption from external sources, this article attempts to argue that sources of finance would be detrimental to the innovation ability of firms. Although formal banking finance suffers from asymmetric information, it is less risky to invest on R&D compared to that of non-banking sources and capital market. In other words, the fund received from formal banking source raises innovation, and, thereby, exportability of firms and financing from other sources involve higher cost and limit innovation capacity and exportability. Analysis of firm-level database provided by the World Bank Enterprise Survey confirms that firms depend more on formal banking source for investment in innovation, and this is found to be significant in explaining innovation and exportability.JEL Codes: F20, F36

This paper makes an attempt to estimate the index of informal sector employment that can be attributed to the supply-push phenomenon. Factors explaining the inter-state variations in this index include the industrial-informal sector wage gap, revenue expenditure and development expenditure incurred by the government. Increased development expenditure brings a decline in distress-led informalization because education, health and infrastructure facilities tend to enhance the employability of an individual. However, education as such does not reduce the residual absorption in the informal sector unless there is improvement in quality. The paper also notes an increase in inequality with an increase in distress-led informalization. Adoption of labor intensive technology in the organized or formal industrial sector is indeed crucial for pro-poor growth. The other policy implication is in terms of enhanced investment in the areas of human capital formation and overall development of the region.

Is the informal sector in India a means of exploitation or a means of accumulation? One view takes the informal sector to be a site for primitive capital accumulation, with underpaid workers working in abysmal conditions. Another view takes the informal sector to be the venue for economic dynamism and entrepreneurial creativity. In this article, we evaluate these two views in relation to theories of the informal sector and empirical studies on India. We argue that both views have merit in the Indian context and accounts of the informal sector in India need to take into account the complexity and heterogeneity of production and labour relations that characterises the sector.