ISSN (Online) - 2349-8846

S K SrivastavaSubscribe to RSS - S K Srivastava

Changes in Rural Economy of India, 1971 to 2012

The transition in the rural economy in the last four decades is examined based on the analysis of growth and composition of output and employment. A reduction in the share of agriculture, and a dominance of non-farm activities in the rural economy is noted from 2004–05 onwards. However, agriculture continues to be the predominant source of employment. Employment in the construction sector increased substantially, but was not large enough to absorb workers leaving agriculture, resulting in a decline in rural employment after 2004–05. A serious imbalance has emerged in output and employment in different sectors in rural areas requiring urgent attention to create jobs in manufacturing, services, and construction. Creation of jobs in rural areas requires a complete rethink of rural industrialisation.

Changes in the Rural Labour Market and Their Implications for Agriculture

The rural labour market is undergoing significant changes mainly due to rising employment opportunities outside agriculture. The real wage rate for farm as well as non-farm rural labour is moving upwards. This has serious implications for the farm sector. This study examines the trend and pattern of rural labour diversification and identifies the underlying factors for this change. The movement of workers outside the agriculture sector was found to be influenced by a complex set of factors such as the pattern of economic growth, inter-sectoral differences in the wage rate and worker productivity, government programmes, education, and sociocultural factors prevailing in rural India.
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