Livelihood Diversification and income distribution among Rural Households of Sikkim: A study

The phenomena of rural household, making diversified form of livelihoods has been a common found outcome by researchers throughout the world. There are different causes of diversification and has differential outcome to the income distribution because the problems of livelihoods are context specific, temporal and spatial. Selecting 300 households randomly, from the eight different types of villages of Sikkim for the study purpose, this paper tries to make an inquiry of diversification of livelihoods and distribution of rural incomes. Using Simpson‘s diversification index, the extent of diversification has been measured to be 0.55 and using Gini coefficient the inequality in income distribution. Further decomposition of Gini inequality according to income source has been done and the major source of rural income inequality has been identified. It is indicated that despite the centrality of agriculture, rural households are engaged in other nonfarm activities for an alternative income sources. Results indicate, that both the farm income as well as the nonfarm income to be the cause of rural income inequality.