Rural distress deepens: Wage growth
dips, non-farm jobs hit
Mains Paper 4: Economy
Prelims level: Labour Bureau Data
Mains level: Labour and employed related distress
- A study on rural wages over the past 5 years was recently
published based on the Labour Bureau data on wages.
- Rural wages have grown 3.8% year-on-year in December, 2018.
- It given the annual rural consumer price index (CPI) inflation of
1.5%, it means wages rose just over 2.3% in “real” terms (wages adjusted for
- The average year-on-year wage growth for December during 2014 to
2018 (NDA government) stands at 4.7% in nominal terms and a mere 0.5% in
- In comparison, for the same month of the preceding 5 years (2009
to 2013), nominal rural wages grew by an annual average of about 17.8%.
- With average CPI inflation for agricultural workers at 11.1% over
the same period, the real growth in wages was still higher at 6.7% a year.
Analysing the new trend
The lower wage growth in the last 5 years has not been
confined to agriculture-related work alone.
The average growth in December for eight main
agricultural occupations was higher (5.14%) than for general wages (4.68%)
On the other hand, the December year-on-year wage
growth for skilled workers has lagged behind overall rural wage growth in 3
out of the last 5 years.
The average growth in wages for construction and
general non-agricultural labour has been even lower.
In other words, the crisis in rural India now is not
just about farm incomes, as it is equally 'off-farm' as 'on-farm'.
Agricultural productivity with favourable rainfall
conditions and remunerative farm prices, and non-farm employment at better
wages are the main sources of poverty reduction in rural areas.
But notably, both of these crucial elements for
poverty reduction have been absent in the past five years.
- The wage trend coincides with increasing divergence in wholesale
inflation in food and non-food items in recent times.
- E.g. In December 2018, wholesale inflation for food items was
-0.07% but it was 4.45% for non-food items.
- This is a sign that the terms of trade have turned decisively
- The government will thus have to examine how this state of affairs
can be remedied.
- Non-farm employment in rural areas clearly needs a boost.
- Historically wages for non-farm employment have been boosted by
spending on health and education.
- The focus now needs to be on quality assurance in these sectors,
particularly when it comes to public provision of these services.
- Besides, the question of agricultural prices and terms of trade
also needs to be considered, with a pro-farmer trade policy.
- As, the world price of commodities has a significant impact on
terms of trade for Indian farmers.
- Farmers need to be allowed to take full advantage of increases in
- Properly working commodity markets that are globally integrated
and allow for various forms of insurance and safeguards must be a priority.
Q.1) Section 124-A of the Indian Penal Code which deals with Sedition is
often in the news. Which of the following personalities was/were charged under
Section 124A of IPC during the Indian National movement?
1. Raja Ram Mohan Roy
2. Bal Gangadhar Tilak
3. Mahatma Gandhi
Select the correct answer using the code given below.
(a) 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Q.1) What are the factors responsible for rural distress among labours ?