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

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Agriculture, Manufacturing and the Rural Non-Farm Sector

The Stunted Structural Transformation of the Indian Economy

India's economy has accelerated sharply since the late 1980s, but agriculture has not. The rural population and labour force continue to rise, and rural-rban migration remains slow. Despite a rising labour productivity differential between non-agriculture and agriculture, limited rural-urban migration and slow agricultural growth, urban-rural consumption, income, and poverty differentials have not been rising. Urban-rural spillovers have become important drivers of the rapidly growing rural non-farm sector, which now generates the largest number of jobs in India. Rural non-farm self-employment is especially dynamic with farm households diversifying into the sector to increase income. The bottling up of labour in rural areas means that farm sizes will continue to decline, agriculture will continue its trend to feminisation, and part-time farming will become the dominant farm model.

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