Wage dynamics and inequality situation in rural India: recent trends and determinants

This article examines the level of and recent trends in rural wages and the extent of the wage gap and inequality across the states. It also attempts to identify the determinants of rural wage rate in agriculture. The data are extracted from the various issues of Wage Rate in Rural India (WRRI) published by the Labour Bureau. Real wages rose continually and persistently for both agricultural and non-farm activities in rural areas. Inequality in the wage rate is less among diverse agricultural operations within and across the year(s). Though there was no discernible pattern across states, inequality over the years declined during the study period. However, inequality and the wage rate differ significantly by gender. The effective implementation of the minimum wage law and equal pay for work of equal value would reduce the wage gap and inequality. Creating social infrastructure and public investment in agriculture would enhance labour productivity and ensure livelihood security in the rural economy.