Attention has been paid to the significance of the non-farm sector in the rural Indian economy since the early 1970s. The importance of earnings from secondary non-farm occupations is not well documented. In this paper an attempt is made to assess the contribution of the nonfarm sector across population quintiles defined in terms of average per capita income. The correlates of employment in the non-farm sector and the direct impact of a growing non-farm sector on agricultural wage rates in rural India have also been examined. The study is based on rural data from 32,000 households belonging to 1765 villages across all parts of India collected by the National Council of Applied Economic Research in 1993-94. Analysis shows that non-farm incomes account for a significant proportion of household income in rural India with considerable variation across quintiles and across major Indian states. Education, wealth, caste, village level agricultural conditions, population densities and other regional effects influence in determining the access to non-farm occupations. Direct contribution of the nonfarm sector to poverty reduction is possibly quite muted as the poor lack the assets. It has also been found that the growth of certain non-farm sub-sectors is strongly associated with higher agricultural wage rates. The analysis presented in this study suggests that the policy makers seeking to maximise the impact of an expanding non-farm sector on rural poverty, should concentrate on two fronts. First, efforts should be focused on removing the barriers to the entry of the poor into the non-farm sector. This involves improving the educational level in rural areas. Second, the policy makers should note the strong evidence of an impact on agricultural wages of the expansion in rural construction employment. [WP No. 81]
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Angus Deaton & Alessandro Tarozzi, 2000.
"Prices and poverty in India,"
Working Papers
213, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007.
"Rural Income Generating Activities; A Cross Country Comparison,"
Working Papers
07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
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