ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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This edition of the Review of Rural Affairs brings together five papers that highlight the issues of livelihood insecurity and fragility in general and poverty, inequality, and employment insecurity in particular among the rural populations, especially farmers and labourers. Observed through the lenses of occupations and castes, the persisting trends of heightened vulnerability of the poorest groups, which the papers bring to the fore, are reflective of the broader econo­mic phenomena encompassing the country, that of agrarian distress and the informalisation and contractualisation of the formal workforce.

The issue of low income of farmers and the high incidence of poverty among them is a problem that has plagued Indian agriculture for quite some time now. This problem has also gained increasing attention from policymakers in recent times. However, there does not exist any consistent time series of real farm incomes at the state level. Dipankar Basu and Kartik Misra, in their paper “An Empirical Investigation of Real Farm Incomes across Indian States between 1987–88 and 2011–12” (p 7), construct consistent estimates of average real farm incomes for 18 major Indian states between 1987–88 and 2011–12. Using this newly constructed data, the evolution of farm incomes across states is analysed, looking both at their levels and growth rates over time. In order to summarise the relative performance of states over the roughly two-and-a-half-decade period, 1987–88 to 2011–12, the states are ranked by the average level of real farm income and growth rates.

They also investigate whether there has been any tendency for convergence of real farm incomes across states and find that there is evidence of convergence of real farm incomes across Indian states once they condition on time-invariant state-level factors. But the tendency towards convergence has not been strong enough to change the ranking of states in terms of real farm income per cultivator drastically. States with the highest levels of real farm income per cultivator in 1987–88 were more or less the same states that had the highest level of real farm income per cultivator in 2011–12. Further, they investigate whether market-oriented reforms of the state-controlled agricultural marketing system have led to an increase in real farm incomes using a simple difference in difference research design. Using archival data compiled from the annual reports from the Ministry of Agriculture and Farmers’ Welfare and academic research, they ascertain if and when each state initiated reforms of the state-controlled agricultural marketing system. The states that initiated reforms are categorised as part of the treatment group and those that did not undertake any reforms become part of the control group. By comparing the change in average real farm income before and after reforms between treatment and control groups, they estimate the effect of the reforms and find that market-oriented reforms did not have any positive impact on real farm incomes.

The paper by H R Sharma and S H Malik, “Farm Size and Farmers’ Income, Consumption, and Poverty in India: State-wise Estimates of Direct Income Support to Farmer Households” (p 15), uses unit-level data available from the National Sample Survey 70th round Situation Assessment Survey of Agricultural Households, 2013 and seeks to determine the minimum size of cultivated land across the states at which the average monthly income from cultivation of farmer households exceeds the average monthly consumption expenditure, given the technical know-how, resource-use efficiency, and availability of irrigation and credit facilities; and the minimum farm size at which the average monthly income from all sources exceeds the poverty-line-equivalent average monthly income. Further, they assess the contribution of different sources of income towards the total income of agricultural households in different farm-size categories across different states and the incidence of poverty among agricultural households in different farm-size categories. Finally, they estimate the income support that needs to be given to the farmer households that are below the poverty line in each of the major states to enable them to meet their average monthly/annual consumption expenditure. These estimates would help in designing state-specific, target-group-focused income support policies to augment farmers’ income.

Yet another paper, “Income and Inequality across Rural–Urban, Occupational, and Caste Divides” (p 23), also emphasises the need to provide sustained income support to the bottom of the income distribution as an immediate economic priority. Anand Sahasranaman and Nishanth Kumar study the dynamics of income distribution and inequality in India from 2014 to 2019, with a particular focus on the bottom of the distribution. Using panel data from the Consumer Pyramids Household Survey to construct the Indian income distribution, they explore the evolution of income inequality for the country as a whole, as well as for the rural and urban India separately, to generate an understanding of distributional features and inequality. They also empirically examine inequality through the lenses of occupation and caste to identify the typology of India’s most economically vulnerable populations. Finally, in order to explore the dynamics operating at the very bottom of the distribution, they use a stochastic model to quantify the extent and direction of redistribution occurring in the distribution, and the likelihood of incomes at the bottom transitioning higher in the distribution over time. They confirm that the lowest incomes in India today are comprised predominantly of Scheduled Caste (SC) and Scheduled Tribe (ST) populations, working in the most economically precarious occupations and suffering from both declining income shares as well as real income declines. This fragility of incomes among the SCs and the STs is reflective of broader economic trends, including informalisation of the formal workforce and agrarian distress. They argue that the design of sustained income support policies for marginal farmers and wage labourers requires immediate attention.

The process of contractualisation and privatisation has increased the employment insecurities across all caste groups in general. However, it has remained a matter of concern for the SCs, STs, and Other Backward Classes in particular, as they have a lack of access to the most secured forms of employment when compared to the forward classes. The paper, “Caste Inequalities in Access to Regular Non-farm Jobs and the Likely Implication of the Industrial Relations Code” (p 31), by Deepika Jajoria and Manoj Jatav highlights the extent of employment insecurity and informality among the formal regular workers in the formal non-farm sector and examines the differential data outcomes across various caste groups using the National Sample Surveys of Employment and Unemployment, with the analysis drawn broadly for the regular non-farm workers in the organised sector. It also highlights the likely implications of the various provisions of the newly enacted Industrial Relations Code, 2020 on access to the most secured jobs across different caste groups. The authors recommend the implementation of positive discrimination as an affirmative legal instrument across government, public–private, and private enterprises so that social and economic inequalities can be challenged and vulnerabilities among the deprived groups can be minimised.

Indrajit Bairagya, in his paper “Effects of COVID-19 Pandemic on the Rural Non-farm Self-employed in India” (p 39), assesses the capabilities of skilled workers as compared to unskilled workers in the non-farm sector in overcoming the disruptions caused by the COVID-19 pandemic. Using primary data collected from 880 rural non-farm self-employed individuals spread over different regions of Karnataka, the study uses the difference-in-differences technique to assess the differential impact of the COVID-19 pandemic on the earnings of skilled and unskilled self-employed activities. It observes that every section of the rural non-farm self-employed individuals has been adversely affected by the outbreak of the COVID-19 pandemic and the subsequent lockdown measures, and that the decline in the earnings of unskilled individuals is higher than that of skilled individuals. The income differential analysis shows that imparting skill through formal vocational training is critical and provides a conclusive proof that it is imperative for the state and the individuals to invest in skill development not only for economic growth, but also as a support mechanism for households to overcome crisis situations. It advocates the need to enhance formal vocational training for rural non-farm self-employed individuals.


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Updated On : 8th Jul, 2022
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