Paper short abstract:

We posit the concept of colonial encounter as a constitutive element in the process of postcolonial capitalist development. Focussing on informal economy and caste relations, we foreground a framework that centrally locates the encounter and provide illustrations from India to examine the dynamics.

Paper long abstract:

This article posits the ‘colonial encounter’, defined as a contradictory relation between the capitalist and non-capitalist segments of an economy, as a critical and constitutive element in the process of postcolonial capitalist development. It points to the obfuscation of this encounter in the prevalent theoretical approaches in development economics, particularly focusing on the discourse on informal economy and the role of identity relations. It then foregrounds an emerging theoretical framework on postcolonial economic dynamics that frames the development process as being marked by an on-going and ever-occurring colonial encounter. The persistently non-capitalist segments of proliferating informal economies, the economic locus of vast masses of surplus population excluded from burgeoning capitalist segments in the postcolonial economies in the global South, are identified to be intrinsic to the capitalist development process itself. The article then delineates a key lacunae in this theoretical framework to grapple with the role of identities in framing these development dynamics, and discusses some critical approaches towards identity that may be productively integrated to further develop this framework. Finally, it provides some empirical illustrations by drawing from nationally representative surveys on the informal economy in India to highlight the constitutive role of caste in structuring the nature of reproduction of non-capitalist informal enterprises that provide livelihood to excluded working populations, as well as in shaping the pattern of inclusion of a part of this population within capitalist segments as informal wage labor. Through this intervention, the article aims to contribute towards unmooring the discipline of development economics from the prevalent colonial frameworks and finding a productive and generative pathway towards building a decolonized approach towards making sense of economic development under capitalism.