Abstract
This paper examines the role of the Indian informal sector in the process of urbanisation and checks whether models of migration curated by economists are applicable in explaining their role in reducing the dualism that hinders development. The study has been limited to the Indian urban sector (non-agriculture) and the analysis is based on several data sources. Calculated wage differences in the workforce show a persistent urban-rural wage gap over a span of time; the wage gap between regular/ salaried employees and casual labour present at any point of time captures the informalisation of the urban economy. Labour segregation based on skill set and the bifurcation of migrants based on duration of stay are two factors missed by models of migration. The results reveal a substantial contribution by the informal sector in the urbanisation process, in which low-income unskilled rural migrants execute a noteworthy role. In addition, these results share the failure of models of migration to explain the continuation of the informal economy in India.
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