Role of livelihood diversification on poverty and inequality in a rural economy: the case of an underdeveloped state in India

This paper investigates the estimation and interaction of livelihood diversification and its implications on poverty and inequality through production relations in terms of the peasant class, land ownership class, social status and educational level. It explores whether migration as an alternative livelihood strategy is making any impact on poverty in the studied region. The paper analyses what happens to inequality with or without non-farm income. The study depended on primary data sources collected from a household survey conducted in Odisha. The quantitative and econometrics used tools such as the squared poverty gap index, logistic regression analysis and the Gini coefficient index. The hypothesis of production relations in the study region-that it is characterized by the overall dominance of capitalist production relations captured through self-cultivation rather than land-leasing-has been accepted. Migration is likely to associate with a higher level of poverty for both commuters and seasonal migrants than non-migrants in the lower classes of peasant and land ownership. The association of a lower level of inequality has been observed among seasonal migrants irrespective of their monthly per capita expenditure, asset value and land owned.