Rural Non-Farm Employment in India

In this paper an attempt is made to assess the contribution of the non-farm sector to household income across population quintiles. The correlates of employment in the non-farm sector have also been examined. The study is based on rural data from 32,000 households in 1,765 villages across India, collected by the NCAER 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 India's major states. Education, wealth, caste, village level agricultural conditions, population densities and other regional effects influence access to non-farm occupations. The direct contribution of the non-farm sector to poverty reduction is possibly quite muted as the poor lack assets, but it has been found that the growth of certain non-farm sub-sectors is strongly associated with higher agricultural wage rates.