Recent Trends in Rural Employment and Wages in India: Has the Growth Benefitted the Agricultural Labours?

Abstract

This paper has examined three features of the rural economy in the context of transition of Indian economy: (a) shift in rural employment pattern, (b) trends in rural wages and agricultural growth, and (c) relationships between agricultural wages, productivity and rural non-farm employment (RNFE) in India. The change over of farm employment to non-farm employment has been found higher for male than female workers and the recent decade has witnessed a higher rate of transition. The RNF sector provided employment to about 38 per cent of male and 21 per cent of female labour forces in 2009-10. It is observed that although the wages were lower for farm labours than non-farm labour, the growth rate of agricultural wages has been higher than of non-farm wages. The wage determinant analysis has revealed that agricultural productivity and RNFE have a positive influence on agricultural wages, while labour availability (labourland ratio) and high dependency on agriculture pull down the wage rates. The analysis has confirmed that the growths of agriculture and RNFE have trickled down to the agricultural labour, indicating an inclusive growth. The study has concluded that policies directed towards improving agricultural productivity and promoting RNFE would provide better agricultural wage rates and assure rural livelihood security.