Wages and employment in Indian agriculture

0305-750X/80/0501-0413/%02.00/0

World Development, Vol. 8, pp. 413-428 0 Pergamon Press Ltd. 1980. Printed in Great Britain

Wages and Employment in Indian Agriculture AJIT KUMAR GHOSE* International Labour Office, Geneva Summary. - The paper seeks to analyse, at both theoretical and empirical levels, the process of determination of the wage rate and the quantum of employment of casual agricultural labourers in lndia.It isargued that the daily wage rate implicit in the annual wage of an attached labourer, determined probably on the basis of a notion of subsistence, operates as the norm for fiiing the minimum daily wage of a casual labourer. This minimum wage need not, and usually does not, clear the market in casual labour. However, during certain busy periods, the casual labour market approaches a fullemployment equilibrium, and the wage rate rises above the minimum level. Such a process has two important implications: (i) there arises a wage-gap, i.e. the actual wage rate tends to be higher than the expected wage income per unit of labour offered in the marketqnd (ii) an increase in the overall demand for labour does not necessarily iead to a higher wage rate.

1. INTRODUCTION One of the longstanding problems in development economics concerns the question of reconciling the coexistence of a positive real wage rate with widespread unemployment in the agrarian sector of underdeveloped countries. The usual solution is to suppose that the real wage rate is an institutional constant.’ Two alternative hypotheses have been put forward in this context. The subsistence wage hypothesis postulates simply that the real wage is determined on the basis of the subsistence requirements of the workem The ‘efficiency wage hypothesis’, on the other hand, postulates a functional relationship between the efficiency of the worker (i.e. the number of work-units supplied by him) and the wages paid to him through the nutritive value of food intake. A higher wage level, so the argument runs, enables the worker to increase the calorie content of his diet and this in turn will cause an increase in the amount of effort that he supplies. If the workers are existing at a very low level of consumption there may initially be increasing returns to consumption in terms of work units and then later diminishing returns. Under such conditions, there exists a wage level that minimizes the cost per work unit. This then sets a minimum below which the wage rate would not be allowed to fall by the employers.3 Quite apart from the fact that these hypotheses do not lend themselves easily to empirical

verification, they actually seem to be somewhat ill-conceived (given the problematic). An overwhelming majority of the labourers in underdeveloped agriculture work on a casual day-today basis, and are paid a daily wage. It is difficult to see how either a notion of subsistence or a notion of a desirable level of work-efficiency can provide the basis for determining daily wage rates. If workers are paid a daily subsistence, they must starve on the days they are unemployed. On the other hand, any single employer can hardly ensure a desirable level of work-efficiency of a labourer he employs for a few days in a year. A worker’s food intake on a particular day and its effects on his workefficiency must surely depend on his earnings throughout the year. It can, of course, be plausibly argued on II priori grounds that the annual real wage of attached labourers4 is in fact determined outside a demand-supply framework, perhaps on the basis of either a notion of subsistence or a notion of workefficiency. In India, for example, only a small proportion of the agricultural labourers are employed as attached labourerss Agreements regarding the wage and employment of attached labourers are generally reached at the beginning of an agricultural year (or season). * An earlier version of this paper was written while the author was a Research Associate at Queen Elizabeth House, Oxford. The author benefited from discussions with Ashwani Saith. 413

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It is most likely that, given the choice, most agricultural labourers would prefer certainty to uncertainty regarding employment in a situation characterized by large-scale unemployment. Thus in all probability, the supply of attached labourers always exceeds the demand for them. But, given the overwhelming predominance of the casual labour system in underdeveloped agriculture, it would seem more important to understand the process of determination of daily casual wage rate. That casual labourers cannot find employment on all days they seek it is undeniable. Yet the daily real wage does not fall below a certain minimum. This wage rate is clearly not a market-clearing wage rate. Nor can it be determined on the basis of either a notion of subsistence or a notion of a desirable level of work-efficiency. How is it determined then? It is in this context that we must consider the possibility that the annual wage rate of the attached labourers may actually dictate the daily wage rate of casual labourers. There is, of course, no convincing reason to suppose that the annual wage income of casual labourers actually equals that of attached labourers. The very supposition that the annual wage of attached labourers is determined outside a demand-supply framework rules out such a possibility. Indeed, the annual wage of attached labourers is likely to be higher than that of casual labourers.6 Furthermore, there is no satisfactory way of prejudging the, number of days for which an average casual labourer may find employment during a year. Even in an agrarian economy where little technological change is taking place, population growth (through its effects on the labour force) is likely to alter employment conditions almost continuously. The only plausible situation in which the annual wage of attached labourers can dictate the daily casual wage rate is one where the implicit daily wage rate of attached labourers is taken as the norm for fixing the daily casual wage rate. More specifically, it may be hypothesized that the minimum daily casual wage rate equals the implicit daily wage rate of attached labourers. There is no difficulty in assuming that the implicit daily wage rate of the attached labourers is known to the employers and labourers in a particular region at the beginning of an agricultural year (or at the beginning of a cropseason). The hypothesis also allows for the possibility that during certain busy periods, the daily casual wage rate may rise above the minimum level. Furthermore, according to this view, the annual wage income and employment of casual labourers are unknowns, determined by

the specific conditions of demand for and supply of casual labour. It is also clearly possible that on any particular day many casual labourers may remain unemployed without being able to affect the wage rate. Three specific propositions may thus be considered. First, the annual wage of attached labourers is determined outside a demandsupply framework. Second, the minimum daily casual wage rate tends to equal the implicit daily wage rate of attached labourers. Thus, the minimum daily casual wage rate is also determined outside a demand-supply framework. During certain busy periods, however, the daily casual wage rate may rise above the minimum level in response to the pressure of demand. Third, the annual wage-income and employment of casual labourers are determined by the conditions of demand for and supply of casual labour. In the subsequent sections, we shall scrutinize the available evidence from Indian agriculture with a view to examining the relevance of these propositions. In Section 2, characteristics of annual earnings of agricultural labourers are analysed. Section 3 considers the basic features of wages and employment of casual labourers. Section 4 examines the relationships between casual and attached wage rates. Section 5 draws together the empirical findings, considers briefly the relative plausibility of the two alternative hypotheses in explaining the determination of attached wage rates, and comments on the implications of the overall process of wage determination in Indian agriculture.

2. ANNUAL EARNINGS OF AGRICULTURAL LABOURERS IN INDIA The major sources of information regarding the levels of income of agricultural labourers in India are the Agricultural Labour Enquiry Reports’ based on periodic intensive surveys. In addition, some information is also available from a recent round of the National Sample Survey.a On the basis of these data, it is possible to draw a statistical profile of the levels of income of agricultural labourers in various parts of India. The available sources provide data on average annual total earnings and wage-earnings per agricultural labour household. Unfortunately, for the period 1970-197 1 data on wage eamings per household for a only a few states are available to us. However, each household has several earning members (men, women and children), and estimates of average wage earnings

415

WAGES AND EMPLOYMENT IN INDIAN AGRICULTURE Table 1. Average annual total earnings (Rsfhousehold) of agricultural bsbourers in India all India prices)

CaSUal Andra Pradesh Assam Bihar Gujarat Maharashtra Kerala Karnataka Madhya Pradesh Orissa Punjab? Rajasthan Tamil Nadu Uttar Pradesh West Bengal Mean Standard deviation Coefficient of variation

Attached

All

1960-1961

1963-1964

1956-1957

1950-1951

(in

1970-1971

Casual

Attached

All

All

All

387 625 461 * * 469 518 387 377 764 290 293 487 626

395 614 414 * * 399 529 341 347 683 336 338 420 514

566 865 512 704 600 634 621 411 464 745 3:3 463 na.

438 666 463 904 643 554 601 552 460 1090 183 555 952 451

374 572 470 * *

444 633 499 L *

382 577 477 * *

462 439 420 385 523 584 * * 509

403 511 468 332 713 452 * * 606

463 442 431 382 635 __558 * * 517

398 578 377 * * 388 531 321 342 606 349 347 407 482

474 73

506 115

-

486 80

427 98

474 143

444 116

578 148

651 198

0.1540

0.2272

0.1646

0.2295

0.3016

0.2613

0.2561

0.3041

Sources: Agricultural Labour in India: Report on the Second Enquiry (New Delhi: 1960); Rural Labour Enquiry, f,963-55, Final Report (New Delhi: 1973);Nationul Sample Survey, 25th round. Estimation was not possible because the relevant consumer price indices for agricultural labourers were not available. ? Includes Haryana for 1950-1951,1956-1957 and 1963-1964;excludes it for 1970-1971. $ The observation was dropped because non-agricultural wage-income was found to be higher than agricultural wage&come. The labourers, therefore, could not be considered as agricultural labourers, strictly speaking. Table 2. Average annual wage earnings (Rslhousehold) of agricultural labourers in India (in 1960-1961 India prices) 1956-1957

1950-1951

Andhra Pradesh Assam Bihar Gujarat Maharashtra Kerala Karnataka Madhya Pradesh Orissa Punjab? Rajasthan Tamil Nadu Uttar Pradesh West Bengal Mean Standard Deviation Coefficient of variation

Casual

Attached

264 498 360 * *

354 559 416 * *

373 293 330 284 345 324 * * 409

363 422 413 286 578 394 * * 505

273 504 359 * * 372 300 352 284 476 336 * * 417

348 68

429 92

0.1954

0.2145

All

all

1963-1964

Cast&l

Attached

AB

All

305 445 297 * *

348 572 296 * *

312 534 338 * *

274 401 283 258 500 299 305 315 328

324 430 357 342 676 235 264 372 505

280 404 311 271 582 285 299 336 365

440 576 320 545 439 439 412 275 356 541 $ 290 323 na.

367 78

334 74

402 127

360 100

413 103

0.2125

0.2216

0.3159

0.2778

0.2494

-

Sources: Agricultural Labourin India: Report on the Second Enquiry (New Delhi: 1960); Rural Labour Enquiry , \963-65, Final Report (New Delhi: 1973). Estimation was not possible because the relevant consumer price indices for agricultural labourers were not available. t Includes Haryana. *The observation was dropped because nonagricultural wage-income was found to be higher than agricultural wage-income. The labourers, therefore, could not be considered as agricultural labourers, strictly speaking.

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per adult male agricultural labourer are also of interest to us. In order to arrive at such estimates, the annual wage earnings per household in each state were divided by the corresponding number of earners, expressed in adult male unitsg per household. Needless to say, this method introduces some inaccuracy in estimates in so far as all earners may not necessarily have been full-time workers, but the degree of inaccuracy is expected to be roughly similar for all the estimates so that they remain comparable. For the period 1970-1971, however, no such estimates could be made owing to non-availability of the required data. Furthermore, separate information on the earnings of casual and attached labourers were available only for two periods (1950-1951 and 19561957). The relevant estimates are presented in Tables l-3. In order to make the estimates comparable, regionally and temporally, money incomes have been deflated by using consumer price index numbers for agricultural labourers, compiled by the Labour Bureau, and have been expressed in constant 1960- 196 1 all-India prices.‘O The estimates relating to all agricultural labourers for the periods 1950-1951, 1956Table 3. Average annual wage-income

1957 and 1963-1964 are roughly comparable since they are derived from large samples of agricultural labourers, similarly defied. But for the period 1970-1971 the data refer to landless labourers who include landless non-agricultural labourers but exclude landowning agricultural labourers. These data, therefore, are not strictly comparable to those for earlier periods. Keeping in mind the limitations of the data, two conclusions can be drawn. First, regional variation is significant irrespective of whether we consider earnings per household or earnings per adult male agricultural labourer, earnings of casual labourers or those of attached labourers. The coefficients of (regional) variation are quite high in all cases. Obviously, there is no uniform basis for determining payments to agricultural labourers throughout India, However, in a majority of the regions, the incomes of agricultural labourers seem to have remained quite stable over time. Second, it appears that on the whole an attached labourer earns a slightly higher annual wage than a casual labourer, although the evidence is somewhat inconclusive. From the tables, it is clear that the attached labourers, generally speaking, have a higher level of income than the casual labourers. This remains

(Rs) per adult male agricultural labourer (in 1960-l

1950-1951

96 l all-India prices)

1956-1957

1963-1964

Casual

Attached

All

Casual

Attached

All

Au

Andhra Pradesh Assam Bihar. Gujarat Maharashtra Kerala Karnataka Madhya Pradesh Orissa Punjabt Rajasthan Tamil Nadu Uttar Pradesh West Bengal

143 408 183 * * 205 158 174 181 240 164 * * 294

135 444 226 * *

140 413 182 * *

163 316 181 * *

160 329 229 * *

161 325 200 * *

130 180 176 170 383 320 * * 404

204 162 174 172 299 178 * * 300

155 211 142 146 318 175 175 194 233

156 219 170 187 414 133 130 188 301

155 212 153 153 264 165 167 192 252

220 356 190 263 214 231 213 141 158 326 $ 156 187 n.a.

Mean Standard deviation Coefficient of variation

215 81

257 119

222 87

201 60

218 87

208 71

221 66

0.3767

0.4630

0.3919

0.2985

0.3991

0.3413

0.2986

Sources: Agricultural Labourin India: Report on the Second Enquiry (New Delhi: 1960); Rural Labour Enquiry, !963-65, Final Report (New Delhi: 1973). Estimation was not possible because the relevant consumer price indices for agricultural labourers were not available. t Includes Haryana. $ The observation was dropped because nonagricultural wage-income was found to be higher than agricultural wage-income. The labourers, therefore, could not be considered as agricultural labourers, strictly speaking.

417

WAGES AND EMPLOYMENT IN INDIAN AGRICULTURE Tabie 4. Results of t-tests for differences

between sample means of earnings of casual and attached labourers

Sample 1950-1951

1956-1957

Categories of

Categories of

income

labourers

Mean

Standard deviation

Total earnings per household

Casual Attached

474 506

73 115

Wage earnings per household

Casual Attached

348 429

8: 81 119

Degrees of

t -0.74

freedom 18

-1.92* 18

Wage-earnings per adult male

Attached

215 257

-0.92

18

Total earnings per household

Casual Attached

427 474

98 143

-0.94

22

Wage earnings per household

Casual Attached

334 402

74 127

- 1.60+

22

Wage earnings per adult male

Casual Attached

201 218

60 87

-0.56

22

CaSld

* Significant at 5% by one-tailed test and at 10% by two-tailed test. t Significant at 10% by one-tailed test and at 20% by two-tailed test.

true whether we consider total earnings per household, wage-earnings per household or wageearnings per adult male labourer. But when we subject the data to statistical tests, the results are ambiguous. The result of t-tests” for determining the significance of the differences between the sample (crosssection) means of the incomes of casual and attached labourers are shown in Table 4. These results show that total earnings per household are not significantly higher in the case of attached labourers than in the case of casual labourers. Wageearnings per household of attached labourers are found to be significantly higher in both cases. But’wageearnings per adult male attached labourer, although always higher, are not significantly so. It may be recalled that these were not directly available and were estimated. The extent to which these results have been affected by estimation errors is thus not clear. On the whole, it does not seem unreasonable to conclude that attached labourers generally earn a slightly higher annual wage-income than casual labourers.

3. WAGES AND EMPLOYMENT OF CASUAL AGRICULTURAL LABOURERS There are two major sources of data on agricultural wages: (i) Agricultural Wages in India (AWI) published annually since 19511952 by the Ministry of Food and Agriculture; and (ii) the rural survey reports pertaining to the years 1950-1951, 1956-1957, 19631965 and 1970-1971. The AWI data, although

more detailed, are widely regarded as unreliable.r2 Our analysis of agricultural wages in India will be based on the data from the rural labour survey reports. In Table 5, we have presented the data relating to the state-wise average real wage rates in agriculture. In order to make inter-state and inter temporal comparisons possible, money wage rates have been expressed in constant 1960- 196 1 all-India prices.13 The wage data for different periods are roughly comparable even though the scope and methodology of sampling were somewhat different for different periods. Daily wage rates can only refer to the casual labourers and, hence, the reliability of the data is relatively independent of whether or not a distinction was actually made between casual and attached labourers. Similarly, it is relatively unimportant whether the samples included only landless labourers or both landless and landowning labourers. The following observations may be made on the basis of these data. First, the extent of the inter-state variation in casual daily wage rate is quite significant. Second, in a majority of states the real wage rates appear to have remained remarkably stable over a period of 20 yr. In only three states, namely Punjab (including Haryana), Rajasthan and Kerala, the real wage rate shows a significant upward trend, while it seems to have declined in West Bengall Casual wage rates, however, often show significant seasonal variation. If we look at the operation-wise wage rates, we generally observe that wage rates for such busy season operations

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DEVELOPMENT

Table 5. .4verage daily real wage rate (paise) of casual agricultural labourers in India: 1950/1951-1970/1911 (at 1960- 196 1 all-India prices) 1950-1951a Andhra Pradesh Assam Bihar Gujarat Maharashtra Kerala Karnataka Madhya Pradesh Orissa Punjab Haryana Rajasthan Tamil Nadu Uttar Pradesh West Bengal Mean Standard deviation Coefficient of variation

1950-1951b

1956-1957

1964-1965

97 180 111

89 164 101

81 125 89

120 103 87 80 170

109 93 79 73 155

117 91 78 87 185

83 143 92 92 95 137 81 83 96 140

114

104

141

128

98 76 108 112

125 89 80 105

120 33 0.2750

110 27 0.2455

104 29 0.2788

103 22 0.2136

1970-1971 111 157 110 118 117 171 100 88 93 234 211 165 123 161 88 136 45 0.3309

Sources: Rural Labour Enquiry, 1963-65, Final Report;IVational Sample Survey, 25th round. Notes: For 1950-1951, the estimate ‘b’ shows the wage rates (presented under estimate ‘a’) deflated by 10%. This is done because the kind components of the wage rates in 1950-195 1 were evaluated at retail prices while wholesale prices were used for the same purpose for other periods. For 1950-1951, 1956-1957 and 19641965, Punjab includes Haryana.

Table 6. Maximum and minimum daily real wage rates (paise) of casual agricultural labourers in India (in 1960-l 961 all-India prices) 1950-1951a MaxiMinimum mum

1950-1951b IMaxiMinimum mum

1956-1957 MaxiMinimum mum

Andhra Pradesh Assam Bihar Gujarat Maharashtra Kerala Karnataka Madhya Pradesh Orissa Punjabi Rajasthan Tamil Nadu Uttar Pradesh West Bengal

112 200 159 * *

76 165 91 * *

101 180 143 * *

68 149 82 * *

85 136 99 * *

15 117 87 * *

137 109 110 94 247 134 * *

105 83 62 79 147 104 * *

123 98 99 85 222 121 * *

95 75 56 71 132 94 * *

148

124

133

112

120 117 92 95 230 110 83 124 125

Mean Standard deviation Coefficient of variation

145 47

104 33

131 42

93 30

118 39

0.3241

0.3173

0.3206

0.3226

0.3305

1964-1965 MaxiMinimum mum

71 71 60 67 125 83 55 89 105

108 293 123 113 113 143 111 100 104 176 172 180 124 135

75 139 90 64 97 119

84 22

143 51

88 26

0.2619

0.3566

:: 78 125 95 72 51 102

0.2955

Sources: Agricultural Labour in India: Report on the Second Enquiry (New Delhi: 1960); Rural Labour Enquiry, 1963-65, Final Report (New Delhi: 1973). * Estimation was not possible because the relevant consumer price indices for agricultural labourers were not available. * Includes Haryana. 1951a. 1951b: See notes to Table 4.

1.30 1.15 1.30 1.22 1.45 1.47 1.15 1.12 1.15 1.50 1.50 1.15

1.60 1.41 1.35 1.36 1.43 1.55 1.46 1.34 1.36 1.67 1.75 1.51 2.35 1.89 1.88 1.86 1.83 1.80 1.80 1.74 1.81 3.25 3.20 2.20

Ferozepur and Amritsar, Punjab, 1954-195s

Source: Studies in the Economics of Farm Management, various reports.

March April May June July August September October November December January February March April May June

Montn

24-Parganas, West Bengal 1956-1957

Uoogly ,

West Bengal, 1956-1957

2.60 2.73 2.14 2.69 2.64 2.57 2.44 2.42 2.56 2.69 3.46 3.03

Muzaffarnager, Uttar Pradesh, 1968-1969

5.32 5.11 5.40 6.17 5.96 4.66 4.77 4.99 5.14 7.81 9.92 8.19

Ferozepur, Punjab, 1969-1970

Table I. Month-wise distribution of wage rates (Rs/day at constant prices) in selected districts in India

4.18 4.20 4.49 4.67 4.47 5.12 5.14 4.69 5.52 3.56 3.60 3.99

Nowgong, Assam, 1969-1970

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as ploughing, transplanting and harvesting are higher than those for such slack season operations as weeding, irrigating, harrowing etc. We can get some idea of the range of such variation from the data presented in Table 6. As these data show, the range of variation is often significant and the maximum wage rate can be as high as twice the minimum. Two more interesting features are also worth noting. First, regional variation in the minimum wage rate is as significant as that in the maximum. When viewed over time, however, the former shows greater stability than the latter. Second, the relationship between the maximum and minimum wage rates appears to be independent of their absolute levels.15 Alternatively, we could look at the monthwise variation in casual wage rates. The Agricultural Labour Enquiry Reports do not provide month-wise wage data. Such data are, however, available in some of the Reports on the Studies in the Economics of Farm Management published by the Government of India. We have put together some of these data in Table 7. Since relevant consumer price index numbers were not available, money wage rates have been so adjusted as to take account of changes in the local retail price of the major food crop in each region. It can be observed that roughIy speaking, during two busy months in a year (DecemberJanuary in West Bengal, April-May in Punjab and Uttar Pradesh, and November-December in Assam) casual wage rate tends to reach its peak. It is aIso noticeable that the wage rate tends to remain remarkably stable during the rest of the year. We may now turn our attention to the question of unemployment in Indian agriculture. There are two major concepts and methods of measurement of unemployment. The first rests on the idea that only those who are idle and at the same time are available for work need be categorized as unemployed. Thus, the relevant criterion for the purpose of measurement is the subjective response of the workers themselves. The second concept, that of ‘surplus labour’ or ‘disguised unemployment’, associates rural unemployment with the labour in peasant households that could be shifted to other more productive activities without causing a reduction in the agricultural output. The measurement of this ‘surplus’ is based on indepently set norms of work and productivity.16 The first measure reflects the excess supply of labour currently available from individuals constituting the labour force in a given situation. The second reflects the potential ‘surplus’ that could be mobilized, perhaps with suitable

changes in institutional and production structure. In the past, economists’ attention has been almost exclusively confined to the second concept, i.e. that of surplus labour.” Since we are interested in studying the basic characteristics of the labour market and the process of wage determination, it is the first concept that is relevant for our purpose. There are two sources of data on rural unemployment, namely, the National Sample Surveys and the surveys of rural labour. The National Sample Surveys have followed a ‘labour force approach’ with a short specific reference period of 1 day and/or 1 week. Under this approach, persons having some gainful work, however nominal, on the reference day or on at least 1 day during the reference week have been classified as employed. Persons without gainful work throughout the reference period seeking work, or not seeking but available for work, have been reported as unemployed. The resulting estimates, therefore, only indicate the average proportion of persons in the labour force who were unemployed for at least the duration of the reference period. They cannot be taken as indicating either the extent of chronic unemployment or the extent of under utilization of the available supply of labour. It should also be remembered that these estimates relate to the total rural work-force, i.e. cultivators as welI as agricultural labourers. Table 8. Incidence of unemployment (for maies) in rural India Year

Percentage of workers unemployed

1952 1953 1953-1954 1955 1955-1956 1956-1957 1958-1959 1959-1960 1960-1961 1961-1962 1964-1965 1966-1967

0.08 1.66 0.54 0.85 2.01 4.50 3.64 3.15 2.59 3.74 2.68 1.82

Source: Visaria (1970). The National Sample Survey data are presented in Table 8. As can be seen from it, the rate of unemployment in India’s rural areas is surprisingly low. Only a few of those in the labour force appear to fail to find any work at aII. This fact only serves to confirm the generally held suspicion that the poor cannot afford to be wholly unemployed. The problem in India’s

421

WAGES AND EMPLOYMENT IN INDIAN AGRICULTURE rural areas is not so much unemployment as underemployment. These data, however, do not give us any idea of the extent of underutilization of the available Iabour supply. Valuable information on this aspect is fortunately available from the rural Iabour surveys. They give for each state the number of days (in a year) for which an average adult male casual agricultural labourer was unemployed due to want of work. These

data allow us to arrive at some estimates indicating the broad order of magnitudes relating to underemployment without having to set a norm of full employment. ln Table 9 we have presented our estimates of the proportion of the total available mandays (supplied by agricultural labourers) unemployed due to want of work in each state. In the first Agricultural Labour Enquiry (1950-l 95 1) fiim data on unemployment were

collected only for those adult male labourers who reported some wage-employment during the reference period. Thus, for 1950-1951, the rates of underemployment are underestimates since the labourers who were wholly unemployed during the reference period have been left out of account altogether. This methodological flaw was, however, rectified in the course of the two later surveys. But, for 19641965, the rates of underemployment refer to

all agricultural labourers rather than casual labourers only. These are, therefore, also underestimates since the attached labourers generally do not suffer from underemployment. If we keep these limitations of the data in mind, the seriousness of the problem of underemployment in rural India is fairly obvious. In a majority of the regions, between 20 and 40% of the currently available labour days are not utilized. Like the wage rate, the rate of underemployment of casual labourers shows considerable seasonal variation. Seasonality of employment, however, rarely received proper attention in the past, and we have to content ourselves with rather sketchy evidence. Only the first Agricultural Labour Enquiry Report provides data on the month-wise unemployment due to want of work of adult male casual labourers in each state. These, however, relate only to those who were actually employed on wages during each month for at least 1 day. Fortunately, the Report also provides data on the proportion of adult male casual labourers in each state who where wholly unemployed in each month. Using these two sets of data, we have estimated the overall month-wise rate of unemployment in each state, and these are presented in Table 10. We have also presented in Table 10 the data on the proportion of labourers who were

Table 9. Rates of underemployment among male agricultural Qbourem in India

Andbra Pradesh Assam Bihar Gujarat Maharashtra Kerala Kamataka Madhya Pradesh Orissa Punjab* Rajastban Ta& Nadu Uttar Pradesh West Bengal

1950-1951

1956-1957’

33.75 1054 27.20

26.39

46.29

27.06 2.51 18.39 12.54 53.22 35.26 35.97 10.25 18.30

4.74 24.04 18.11 41.24 20.00 17.62 24.68 29.50

25 .oo 38.62 21.23 27.24

1964-1965 6.47 5.41 23.97 13.21 10.99 36.17 15.12 9.92 13.51 8.13 15.01 33.75 13.46 11.07

Sources: Rural Labour Enquiry, 1963-1965, Final Report; National Sample $ovey, 25th round. Punjab includes Haryana. The rate of underemployment is defmed as the number of days unemployed due to want of work expressed as a percentage of total number of available man-days (number of days employed plus number of days unemployed due to want of work). For 1950-1951 and 1956-1957, the rates of underemploymentrefer to male casual labourers only, while for the later period they refer to all male agricultural labourers.

48.60

Bombay

22.59 (95.9)

41.45 (76.3)

Bihar

39.23 (85.9)

31.62 (100.0)

Rajasthan

Tamil Nadu

22.50 (96.6)

11.17 (96.6)

29.69 (97.2)

23.02 (89.7)

19.97 (98.3)

14.61 (94.6)

33.20 (95.9)

54.53 (72.9)

63.29 (70.3)

22.45 (87.1)

25.68 (87.8)

38.51 (67.0)

23.04 (94.3)

16.54 (100.0)

14.23 (95.7)

27.40 (100.0)

37.17 (78.4)

67.82 (58.1)

17.40 (89.0)

24.04 (84.7)

38.51 (62.5)

29.87 (91.1)

47.68 (92.9)

31.62 (79.5)

9.64 (95.4)

51.98 (64.1)

June 1950

19.17 (99.8)

12.88 (95.1)

27.04 (98.3)

29.55 (86.8)

64.02 (73.3)

18.04 (90.8)

27.64 (82.2)

23.09 (78.1)

31.29 (87.1)

55.94 (90.1)

22.56 (87.7)

11.54 (93.2)

49.85 (68.2)

July 1950

19.17 (99.8)

14.15 (94.5)

33.16 (94.1)

32.50 (83.6)

57.64 69.8

18.04 (90.8)

27.06 (82.2)

24.06 (76.8)

33.26 (86.2)

52.74 (91.5)

28.42 (85.2)

9.98 (94.6)

44.70 (73.0)

August 1950

21.64 (99.8)

16.18 (94.3)

31.14 (95.4)

29.12 (85 .O)

65.63 (60.5)

21.14 (89.1)

27.40 (84.1)

19.09 (82.5)

18.92 (95.0)

45.79 (96.3)

43.26 (73.2)

12.96 (93.9)

44.29 (71.4)

September 1950

25.86 (94.7)

12.19 (95.1)

34.67 (91.4)

29.33 (84.8)

46.32 (77.3)

24.36 (86.2)

30.53 (84.0)

21.29 (79.9)

20.06 (94.1)

42.31 (99.4)

45.34 (71.6)

15.35 (95.4)

41.22 (73.4)

October 1950

17.93 (92.9)

12.53 (95.0)

36.34 (92.5)

33.03 (81.6)

49.82 (75.0)

20.93 (90.0)

25.70 (84.4)

13.63 (86.7)

33.65 (90.3)

43.71 (97.7)

37.18 (79.4)

9.65 (97.6)

40.04 (72.2)

November 1950

12.25 (97.9)

6.51 (99.6)

37.51 (90.9)

34.93 (92.5)

16.32 (94.5)

45.76 (79.3)

39.10 (82.3)

13.64 (95.0)

61.77 (65.7)

22.31 (80.7)

27.40 (87.6)

23.20 (77.4)

32.75 (88.7)

55.55 (88.0)

51.95 (67.4)

16.98 (92.9)

50.89 (67.0)

January 1951

59.42 (58.7)

20.91 (84.8)

24.96 (88.1)

22.51 (78.9)

36.35 (87.1)

54.27 (94.4)

38.61 (79.9)

10.39 (95.6)

46.17 (70.7)

December 1950

Source: Report on the Intensive Survey of Agricultural Labour, First Agricultural Labour Enquiry (New Delhi: 1954), various volumes.

19.13 (96.9)

46.72 (80.2)

Punjab

West Bengal

45.63 (77.9)

21.60 (90.6)

Orissa

8.30 (96.9)

47.22 (86.6)

31.38 (81.6)

Madhya Pradesh

Uttar Pradesh

30.34 (70.6)

28.54 (72.4)

Mysore 26.42 (87.9)

20.52 (95.8)

24.61 (94.0)

43.96 (93.5)

39.38 (75.9)

40.50 (75.2) 53.39 (89.4)

11.45 (95.8)

53.62 (65.1)

May 1950

16.04 (96.1)

49.10 (67.0)

April 1950

Kerala

(100.0)

20.27 (95.6)

(72.7)

41.59

March 1950

Assam

Hyderabad

February 1950

rz +

27.09 (78.5)

17.84 (93.0)

38.52 (86.6)

47.80 (74.5)

68.70 (61.0)

‘; g

$

x

C u

3

G

27.09 (85.8)

31.79 (68.8)

36.01 (87.6)

56.40 (83.4)

58.81 (59.4)

16.64 (94.1)

51.00 (63.5)

February 1951

(figures in parentheses represent the percentage of labourers who found some employment during the month)

Table 10. Month-wise rates of underemploymen t of adult male casual labourers: 1950-1951

423

WAGES AND EMPLOYMENT IN INDIAN AGRICULTURE

employed for a part or whole of each month, since these are useful supplementary indicators of the nature of seasonal variations in employment. It can be seen that the rate of unemployment fluctuates considerably over the months and declines sharply during some months. There are identifiable peak and slack periods of agricultural activity and intensity of labour use. Indeed, in some states (e.g. Assam, Uttar Pradesh, West Bengal) the agrarian economy appears to approach full employment equilibrium during at least 1 month in a year. Although the rate of unemployment remains significantly positive, the proportion of labourers wholly unemployed does become very low. The observations on the seasonal variation in wage rate and rate of unemployment of casual labourers suggest that the casual wage rate is responsive to the pressure of demand for labour. A lack of data prevents us from establishing this beyond reasonable doubt, but some indications are clearly there. For example, the busy months in Assam, Punjab, Uttar Pradesh and West Bengal indicated by the figures in Table 9 (November-December in Assam, March-April in Punjab and Uttar Pradesh, December-January in West Bengal) are also those during which the wage rate reaches its peak (see Table 6). Furthermore, the Labour Enquiry Reports emphasize that this pattern is in fact observed in most parts of India. Two things are clear from the foregoing discussion. First, in each particular region, there appears to be a minimum casual wage rate

which operates as the ruling market wage rate during most months of a year when a large proportion of the available casual labour days remain unemployed. This minimum wage rate, moreover, seems to remain remarkably stable over time. It is thus obvious that this rate is not determined by an equilibrium between the forces of demand and supply. During some months, casual labour market approaches a full-employment equilibrium and the wage rate reaches its peak. It is this peak wage rate that may be said to be determined by the forces of demand and supply. Second, both the maximum and the minimum wage rates show significant regional variation. Furthermore, the relative difference between them is independent of their absolute levels. This is consistent with the observation that they are determined by very different laws. It also seems clear that there is no uniform basis for the determination of the minimum wage rate throughout India.

4. THE DETERMINATION OF THE MINIMUM CASUAL WAGE RATE How is the minimum casual wage rate determined? The hypothesis that we have put forward is that the minimum casual wage rate is set equal to the implicit daily wage rate of attached labourers. We can now confront this hypothesis with data. We have relevant data separately for adult male casual and attached labourers for only two periods: 1950-1951 and 1956-1957.

Table 11. Average and minimum real wage rates of casual Lbourers and implicit daily real wage rates of attached lobourers (paise in 1960- 1961 all-India prices] Average casual Andhra Pradesh Assam Bihar Kerala Karnataka Madhya Pradesh Or&a Punjab* Raiasthan Takl Nadu Uttar Pradesh West Bengal

89

1950-1951 Minimum-

Average

casuil

CaSlld

68 149

164 101 109 93 79 73 155 104

56 71 132 94

41 131 82 66 69 53 50 132 95

128

112

128

fS2 75

Average 81 125 89 117 91 78 87 185 98 76 108 112

1956-1957 Minimum CWJd

75 117 87 71 71 60 67 125 83 55 89 105

Average attached 46 111 102 75 81 55 61 129 45 46 70 99

* Includes Haryana. Note: Average casual wage rates have been taken from Table 5 and minimum casual wage rates have been taken from Table 6. Average attached wage rates have been computed by dividing the annual wage per adult male attached labourer (Table 4) by the corresponding number of davs of wageemployment.

WORLDDEVELOPMENT

424

These are presented in Table 11. The computational procedures are described in the notes below the table, which should also make clear the limitations of the data. The tigures in Table 11 clearly suggest that the average daily casual wage rate is generally higher than the implicit daily wage rate of attached labourers. The latter, however, tends to equal the minimum daily casual wage rate. Further statistical tests confirm these observations. The results of f-tests for differences between sample means are as follows (Table 12):

level. Thus it is only the peak wage rate that in general is determined by the forces of demand and supply. Consequently, the average levels of income, wage rate and the rate of unemployment of casual labourers are determined principally by two variables, viz. the minimum wage rate and the time-distribution of the demand for labour (itself determined by the imperatives of plant biology of the crops grown in any particular region). How, then, is the annual wage of attached labourers determined? Given the fact that it is

Table 12. SamPM 1950-1951

1956-1957

Categories of wage rate

Mean

Standard deviation

Average casual Average attached Minimulncasual Average attached

110 85 93 85

27 35 30 35

Average casual Average attached Minimumcasual Average attached

104 77 84 77

29 28 22 28

t

Degrees of freedom

1.79’

18

0.55

18

2.32t

22

0.68

22

* Significant at 5% by one-tailed test and at 10% by two-tailed test. t Siificant at 2.5% by one-tailed test, and at 5% by two-tailed test. See Note 11. These results convincingly demonstrate that the minimum casual wage rate tends to equal the implicit daily wage rate of attached labourers in practice. This is consistent with the hypothesis that the latter operates as the norm for the former.

determined outside a demand-supply framework, it may perhaps be determined on the basis of either a notion of subsistence or the requirements of work-efficiency. It is difficult to choose between these two alternative hypotheses on the basis of available data. A few relevant facts may, however, be noted. First, the

5. CONCLUSIONS Table 13. Annual wage-employment (days) of adult The’ arguments and empirical evidence examined in the preceding sections suggest the following process of wage determination in Indian agriculture. The annual wage of attached labourers is determined at the beginning of an agricultural year. This annual wage is determined outside the demand-supply framework, since there are always more potential attached labourers than can be empl’oyed. The implicit daily wage rate of attached labourers then operates as the norm for fixing the minimum casual wage rate. During most parts of the year when a large proportion of the available casual labour days in not utilized, casual labourers are paid the minimum daily wage. During the peak periods of agricultural operations, however, the rate of underemployment declines substantially and the wage rate rises above the minimum

male attached labourers

Andhra Pradesh Assam Bihar KLXak

Karnatalca Madhya Pradesh Orissa Punjab* Raj&than Tamil Nadu Uttar Pradesh

West Bengal

1950-1951

1956-1957

333 340 276 198 260 332 337 290 336

346 296 224 207 269 308 308

316

321 296 285 270 304

Source: Agricultural Labour in India, Report on the pond Enquiry (New Delhi: 1960). Includes

Haryana.

WAGES AND EMPLOYMENT

IN INDIAN

AGRICULTURE

425

Table 14. Coefficients of correlation 1950-1951 (a) Between annual wage and annual employment of adult male attached labourers

0.3574(10)

(b) Between implicit daily wage and annual employment of adult male attached labourers

0.089 l(10)

1956-1957

0.2162(12)

-0.1461(12)

Note: Figures in parentheses represent the number of observations. Data on annual wage are taken from Table 3 and those on implicit daily wage are taken from Table 11.

annual wage of attached labourers varies significantly over the regions. (This, incidentally, also explains the significant regional variation in the minimum casual wage rate.) Second, the levels of employment of attached labourers also vary significantly over the regions, as can be seen from Table 13. Third, neither the annual wage nor the implicit daily wage of attached labourers are found to bear any strong relationship to the level of their employment (see Table 14). This may be considered as evidence against the efficiency wage hypothesis. Since nutritional requirements are likely to be positively related to the amount of work done at a given level of efficiency, the efficiency wage hypothesis should lead us to expect a positive association between the annual wage and annual employment of attached labourers.r* We are, therefore, inclined to accept the subsistence wage hypothesis as the more plausible one. It needs to be emphasized, however, that subsistence here does not refer to a minimum nutritional requirement but rather to a notion prevailing in particular regions regarding the acceptable minimum level of living. Let us note, moreover, that even this minimum acceptable level of living is guaranteed only for the at-

tached labourers, and not for the casual labourers. Employment for a casual labourer is a random variable, and so is his annual income. Facts show that a vast majority of the casual labourers actually live below a nutritional minimum.19 An important implication of the process of determination of casual wage rate described above is that the market value of labour appears differently to employers and workers, i.e. there arises a ‘wage gap’. To an employer, the market value of a day’s labour is the daily wage rate. To a worker, however, it is less than the daily wage rate because he cannot find work on all days he is seeking it, i.e. he has a less than unity probability of finding work in a particular day. Another implication is that an increase in the demand for labour, due to technological change, need not necessarily lead to an increase in the wage rate of casual Iabourers although it would raise the levels of their annual income and employment. The effect on the wage rate depends on the time-distribution of the increased demand. A small increase in demand during peak seasons may raise the wage rate substaniially, while a large increase during slack seasons may leave it unchanged.20

NOTES 1. There have been a few, on the whole unsuccessful, attempts to prove that rural unemployment does not exist. See, for example, Schultz (1964); and Pa&n (1965). 2. Cf. Lewis (1954).

5. In India as a whole, attached labourers formed 9.7 and 26.5% of agricultural labourers in 1950-1951 and 1956-1957, respectively. See Agricultural Labour in India, Report on the Second Enquiry. No estimates for more recent periods are available.

See also Fei and Ranis (1964).

3. The hypothesis was originally put forward by Leibenstein (1957). It was further explored by Mazumdar (1959). It has also been the subject of theoretical and empirical investigation in several recent papers. See Rodgers (1975); Mirrless (1975); Stiglitz (1976); and Bliss and Stern (1976). 4. These labourers are employed usually a year.

for a specific period,

6. Consider a situation where all employers employ both casual and attached labour and in the same proportion. The annual wage income of a casual labourer can equal that of an attached labourer if and only if each employer is spending the same amount per casual labourer as per attached labourer. But, in that case, the employers would not be worse off by employing all labourers as attached labourers. Thus, in this situation, if there are casual labourers at all, then their annual wage income must necessarily be less than that

WORLD DEVELOPMENT

426

of the attached labourers. Of course, such a situation does not exist in reality, all employers do not employ casual and attached labour in the same proportion, and there are employers who employ only casual labour. It is thus possible, in principle, for the casual labourers to earn the same annual wage as the attached labourers in some years. But if this is consistently so in every year, then nobody should want to become an attached labourer because, in general, an attached Iabourer works for a greater number of days than a casual labourer. 7. See Reporr on Intensive Survey of Agricultural Labour, First Agricultural Laboor Enquiry (New Delhi: 1954); Agricultural Labour in India, Report on the Second Enquiry (New Delhi: 1960); and Rural Labour Enquiry 1963-65, Finaf Report (New Delhi: 1973).

12. See Rao (1972). 13. See note to Table 5 for a description methodology used. 14. There wage rates and Baker note that agreement

of the

exist two time-series studies of agricultural in India based on the AWI data. See Hardt (1972); and Jose (1974). It is interesting to the findings of these studies are in broad with our observations.

15. An attempt to relate the state-wise data on the maximum wage rate, the minimum wage rate and the ratio of maximum to minimum produced the following results (Table 15). These results are mutually inconsistent and, hence, must be considered as spurious.

Table 15. Coefficients of correlation 1950-1951

19.56-1957

1963-1965

(a) Between maximum and minimum wage rates

0.8612

0.8007

0.6920

(b) Between maximum wage rate and the ratio of maximum to minimum

0.2319

0.4955

0.4158

(c)

Between minimum wage and the ratio of maximum to minimum

8. National Sample Survey, 25th round. 9. The conversion ratios used are: 1 adult male = 0.8 adult female = 0.5 child. These correspond roughly to the ratios of wage rates received by men, women and children respectively. 10. Firstly, the state-wise money earnings were deflated by using the state-wise consumer price index numbers for agricultural labourers to arrive at wage rates at constant 1960-1961 prices. Unfortunately, for some states these indices were not available for all the relevant years and a few observations had to be dropped. However, prices are different :rn different states. In order to take account of such inter-state price differentials, we needed consumer price indices in a given year in rural areas of different states with the all-India rural price level as 100. Bhattacharya and Chatterjee (1974) provide such estimates for five fractile groups in each state for the year 1963-1964. From this we have adopted the Fisher price indices averaged over the bottom 40% of rural population in each state. On the basis of these estimates, we were able to arrive at comparable estimates for 1960-1961 by using the consumer price indices for agricultural labourers. These were then used to express the earnings of agricultural labourers at constant 1960-1961 all-India prices. 11. In each case, the sample variances were found to be not significantly different and, hence, only pooled variance estimates of t-values are reported.

-0.2692

-0.1087

-0.3404

16. Cf. Sen (1975), Chapter 4. 17. There have been quite a few attempts at estimating the extent of ‘surplus labour’ in Indian agriculture, the most notable being that by Mehra (1966). 18. The implicit assumption is that the relationship between nutritional level and work-efficiency is the same across regions. Unless such an assumption is granted, the efficiency wage hypothesis becomes virtually untestable. 19. See the Appendix. 20. This may explain why the ‘new technology’ may have at the same time increased the total labour demand and left the real wage rate unchanged. See Bardhan (1970b);and Lahiri (1970). 21. Several empirical studies on poverty have observed this. See Dandekar and Rath (l971a, b); Bardhan (1970a, b); Minhas (1970); Rajaraman (1975); and the United Nations (1975). 22. This figure has been used extensively in India to quantify the magnitude of rural poverty. See Dandekar and Rath (1971a); Bardhan (1970a. b, 1973). Inevitably, there is an element of arbitrariness in any such attempt at quantification. For an illuminatmg discussion, see Rudra (1974).

WAGES AND EMPLOYMENT IN INDIAN AGRICULTURE

421

REFERENCES Bardhan, P. K., ‘On the minimum level of living and the rural poor’, Indian Economic Review, Vol. 5, No. 1 (1970a). Bardhan, P. K., ‘The Green Revolution and agricultural labourers’, Economic and Political Weekly, Vol. 5, Special number (1970b). Bardhan, P. K., ‘On the incidence of poverty in rural India’, Economic and Political Weekly, Vol. 8, Annual number (197 3). Bhattacharya, N. and G. S. Chatterjee, ‘Between states variation in consumer prices and per capita household consumption in rural India’, in P. K. Bardhan and T. N. Scrinivasan (eds.), Poverty and Income Distribution in India (Calcutta: 1974). Bliss, C. J. and N. H. Stern, ‘Economic aspects of the connection between productivity and consumption’, Mimeo, Discussion Paper, University of Essex (1976). Dandekar, V. M. and N. Rath ‘Poverty in India’, Economic and Political Weekly, Vol. 6, No. 1 (1971a). Dandekar, V. M. and N. Rath, ‘Poverty in India’, Economic and Political Weekly, Vol. 6, No. 2 (1971b). Fei, C. H. and G. Ranis Developmenf of the Labour Surplus Economy: Theory and Policy (Homewood, Illinois: Richard D. Irwin, 1964). Herdt, R. W. and E. A. Baker, ‘Agricultural wages, production and the high yielding varieties’, Economic and Political Weekly, Vol. 7, No. 13 (1972). Jose, A. V., ‘Trends in real wage rates of agricultural labourers’, Economic and Political Weeklv. Vol. 9. No. 13, Review of agriculture (1974). _ Lahiri, R. K., ‘Impact of HYVP on rural labour market’, Economic and Political Week&, Vol. 5, No. 39, Review of agriculture (1970). Leibenstein, H., ‘The theory of underemployment in backward economies’, Journal of Political Economy, Vol. 65, No. 2 (1957). Lewis, A. W., ‘Economic development with unlimited supplies of labour’, Manchester School, Vol. 22, No. 2 (1954).

Mazumdar, D., ‘The marginal productivity theory of wages and disguised unemployment’, Review, of Economic Studies, Vol. 26, No. 71 (1959). Mehra, S., ‘Surplus labour in Indian agriculture’, Indian Economic Review, Vol. 1 (1966). Minhas, B. S., ‘Rural poverty, land redistribution and development’, Indian Economic Review, Vol. 4 (1970). Mirrlees, J. A., ‘A pure theory of underdeveloped economies’, in L. C. Reynolds (ed.), Agriculture in Development Theory (New Haven: Yale University Press, 1975). Paglin, M., ‘Surplus agricultural labour and development: Facts and theories’, American Economic Review, Vol. 55, No. 4 (1965). Rajaraman, I., ‘Poverty, inequality and economic growth: rural Punjab, 1960/61-1970/71’. Journal of Development Studies, Vol. 11, No. 4 (1975). Rao, V. M., ‘Agricultural wages in India - a reliability analysis’, Indian Journal of Agricultural Economics, Vol. 21, No. 3 (1972). Rodgers, G. B., ‘Nutritional based wage determination in low income labour market’, Oxford Economic Papers, Vol. 27, No. 1 (1975). Rudra, A., ‘Minimum level of living - a statistical examination’, in P. K. Bardhan and T. N. Srinivasan (eds.), Poverty and Income Inequality in India (Calcutta: 1974). Schultz, T. W., Transforming Traditional Agriculture (New Haven: Yale University Press, 1964). Sen, A. K., Employment, Technology and Develop ment (Oxford: Clarendon Press, 1975). Stiglltz, J. E., ‘The efticiency wage hypothesis, surplus labour, and the distribution of income in LDCs’, Oxford Economic Papers, Vol. 28, No. 2 (1969). United Nations, Poverty, Unemployment and Development Policy: A Case Study of Selected Issues With Reference to Kerala (New York: United Nations, 1975). Visaria, P., ‘Unemployment in India in perspective’, Economic and Political Week&, Vol. 5, Special number (1970).

APPENDIX LEVELS

OF LIVING

OF AGRICULTURAL

It is well known that agricultural labourers are among the poorest in India.z1 Although we are not directly concerned with poverty, it is nevertheless of some interest to get an idea of the extent of poverty among agricultural labourers. We shall examine below the particular evidence on their levels of living. Agricultural Labour Enquiry Reports and a recent round of the National Sample Survey provide detailed information on the pattern of consumer expenditure of agricultural labourers.

LABOURERS

It is possible to make some judgements about the levels of living of agricultural labourers on the basis of these data once we can decide on a norm. A minimum annual level of consumption expenditure of Rs. 180 (at 1960-l 96 1 all-India prices) has been generally regarded as necessary for an average individual, living in a rural area, to maintain an acceptable minimum nutritional standard.22 Taking account of inter-state differences in the price level, we have arrived at corre-

WORLD DEVELOPMENT

428

Table Al. Poverty line (per capita annual expenditure 1950-1951 Andhra Pradesh Assam Bihar Gujarat Maharashtra Kenila Karnataka Madhya Pradesh Orissa Punjab Rajasthan Tamll Nadu Uttar Pradesh West Bengal India

1960-1961

19561957

179 190 203

193 222 183

189 157 163 160 194 195

197 165 176 165 192 180 199

210

in rupeesj for agricultural labourers in India

1963-1964

1970-1971

210 213 181 217 181 210 183 173 174 196 191 203

218 243 214 258 239 231 199 206 230 223 197 280

359 432 373 375 348 449 344 343 369 380 330 353

153

151

216

276

228

226 180

277

466

Note: Punjab includes Haryana. Table A2. Poverty amongagriculturaliabourers

in India:

19501195

l-1970/1971

% of agricultural labour households below poverty line States

Andhra Pradesh Assam Bihar Gujarat Maharashtra Kerala Kamataka Madhya Pradesh Orissa Punjab Rajasthan Tamil Nadu Uttar Pradesh West Bengal

1950-1951

1956-1957

1963-1964

86.71 35.28 70.13

74.29 31.70 77.35

58.68 29.83 57.31 70.64 60.37 65.65 50.43 49.18 67.39 29.15 51.99 66.78 56.24 73.86

75.10 70.95 79.35 89.60 50.08 62.95

82.99 54.48 74.93 78.55 46.10 64.86 86.50 65.17 75.22

54.99

1970-1971

56.60 53.55 61.00 68.18 70.70 30.25 50.31 66.73 37.83

Sources: Report on Intensive Survey of Agricultural Labour, First Agricultural Labour Enquiry: kgricultural Labour in India, Report on the Second Enquiry; Rural Labour Enquiry, 1963-65, Final Report; National Sample Survey, 25th round. Note: For 1950/1951 the figures for Madhya Pradesh are weighted averages of those for erstwhile Madhya Pradesh, Madhya Bharat and Bhopal; the figures for Kamataka are the weighted averages of those for erstwhile Mysore and Coorg; the figures for Rajasthan are the weighted averages of those for Rajasthan and Ajmer. Also for 1950-195 1, Andhra Pradesh refers to erstwhile Hyderbad and Kerala refers to erstwhile TravancoreCochin. Punjab includes Haryana in all cases. For 19701971, estimates

refer to landless

labourers

only.

spending estimates of poverty thresholds for the different states, and these are presented in Table Al. In order to get a clear idea of the extent of poverty among agricultural labourers, we have estimated the proportion of agricultural labour households which fall below the poverty line in each state. These estimates are presented in Table A2. It can be seen that the vast majority

of agricultural labourers are indeed desperately poor. We should emphasize that the poverty threshold merely takes into account the minimum nutritional requirement of an average rural Indian. Given the fact that uncertainty of employment and income affect only the casual labourers, it is safe to assume that the bulk of the poor belong to their ranks.