This chapter explores how poverty is created and reproduced in the informal economy. It explains the interface between poverty and capitalism—updating, developing, and specifying a general argument first published in Economic and Political Weekly in 2006. The chapter focuses on relations of poverty, on the case of India, and on the counterintuitive question of how capitalism produces and reproduces poverty. The government of India ignored the well-reasoned job-creation and social-security proposal by the National Commission for Enterprises in the Unorganised Sector. In the process of development-induced displacement over the six decades of ‘development’ since India’s independence, vast numbers of people have been uprooted without compensation in favour of mines, dams, irrigation, transport, urban infrastructure, and power plants. The Indian state is responsible for defining and regulating social toxicity. The Indian government’s own remarkable report, Development Challenges in Extremist Affected Areas , acknowledged that for large numbers of tribal people the state has never existed, or exists only in repressive form.