Data Card

Rural employment

Print edition : April 04, 2014

Women work under the MGNREGA at Poonambalayam village near Tiruchi in Tamil Nadu. Photo: A. Muralitharan

An Assocham study on rural employment finds that people are moving out of farm jobs into other vocations.

A study brought out by the Associated Chambers of Commerce and Industry of India (Assocham) on the “Structural Shift in Rural Employment” reveals that people are moving out of farm jobs into other vocations.

The study has some interesting aspects. It says the number of rural poor has declined and that there has been a sector-wise shift in jobs. This means that the number of people working on farms is reducing and dependence on income from this sort of work is also reducing. The study says that for “the first time the percentage of people depending on agriculture has come down from 60 ten years ago to 49 in 2012 with more and more people even in rural areas working on construction or infrastructure jobs or taking up casual employment”.

MGNREGA factor

But the most interesting part of the study is the stamp of validity given to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which came into existence in 2006. The study says this has “played a significant role in raising rural wages and changing the pattern of consumption expenditure in rural households… it is also enabling workers to improve their bargaining power for better wages”.


Some aspects of the study are slightly worrisome. It points out that there is increasing urbanisation of the country. “…From about 5,000 towns over a decade, the number of urban centres has grown to 8,000.” This has its positive side in one way. The study explains, “The positive data about rise in rural farm and other wages has a social effect also. It is the people at the bottom of the pyramid who work in the farms as casual labour; they are also in our social context people at the bottom of the caste hierarchy. The double benefit of higher wages and opening up of many new employments as artisans creates both an income ‘push effect’ and a social ‘push effect’.”

While the changes certainly do offer more scope for self-employment and small businesses, there is the flip side too of what is happening to farmlands. The study concludes that moving away from farm-related jobs “promotes breaking down of traditional attitudes and leads the society towards greater democratisation”. While this is true, one question remains unasked and hence unanswered is: Who will work on the farms?

Fewer rural poor

The latest data, mainly of rural employment and monthly per capita expenditures (MPCE), have rightly caused considerable disbelief, says the study. The data are from the 68th National Sample Survey Office (NSSO) survey. Essentially the data say that “while employment (both rural and urban put together) almost remained stagnant between 2004-05 and 2009-10 at 459 million despite the first four years of it being years of high growth hovering around 9 per cent, the next two years (2009-10 to 2011-12) added 14 million jobs, taking employment to 473 million level, despite these being years that saw a big drop in gross domestic product (GDP) growth to near 6 per cent along with a steep rise in inflation”.

Development spending

The study believes that there is a trend “towards a massive increase in government expenditure that must have had some impact on the economy in terms of job and income creation. There has been significant impact on poverty, more money is flowing into rural areas due to rise in minimum support price for major cereals, spending on rural housing, roads, etc, under Bharat Nirman and rise in rural wages as a result of job entitlement under MGNREGS with a minimum assured wage that acts as a trigger and bargaining chip for higher wages on the farm, etc.

Shift in sector-wise jobs

The study also says that available data reveals a significant shift in the rural job profile, with a reduction in the proportion of workers engaged in agriculture and an increase in the secondary and tertiary sectors, in self-employment and in regular work.


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