Economics Prelims cum Mains

Only 23% of rural income from farming: Survey

The News

  • According to the National Bank for Agriculture & Rural Development’s (NABARD), All India Rural Financial Inclusion Survey 2016-17, even for agricultural households, just over 43 per cent of their average income comes from cultivation of crops and rearing of animals.
  • Agriculture generates less than a quarter of rural household incomes in India.

 

Rural households in India

  • While agriculture may, by definition, be largely rural, the converse, though, isn’t true.
  • The definition of “rural” (according to NABARD), covers revenue villages and semi-urban centres with a population of less than 50,000.
  • The NABARD survey estimates the total number of rural households in India for 2016-17 at 21.17 crore.
  • Out of the 21.17 crore rural households, 10.07 crore, or under 48 per cent, are “agricultural”- Those with at least one member self-employed in farming and reporting annual value of produce at more than Rs 5,000.
  • The remaining 11.10 crore households or 52 per cent are “non-agricultural”.

 

Important facts from the survey

  • The survey reinforces a trend that has gathered momentum since the start of this century – of an increasingly less ‘Krishi’ in ‘Bharat’.
  • According to the survey, whose reference period is 2015-16, the average net monthly income of Indian rural households (after deducting expenses incurred in the course of economic activity) was Rs 8,059.
  • The highest share of this (Rs 3,504) was accounted for by wage labour (both farm and non-farm), which was followed by government or private service jobs (Rs 1,906).
  • On the other hand, agriculture (i.e. income from crop cultivation and livestock rearing) contributed only Rs 1,832.
  • But even within “agricultural households”, the share of average income from cultivation and livestock rearing was just over 43 per cent.
  • The balance 57 per cent income was from non-agricultural sources.

 

NSSO survey data 2012-13 v/s NABARD survey 2016-17

  • The NABARD survey not only reconfirms, but magnifies, the findings of the National Sample Survey Office’s (NSSO) Situation Assessment Survey of Agricultural Households conducted for 2012-13.
  • The NSSO survey had estimated agricultural households to constitute 57.8 per cent of all rural households.
  • In the NSSO survey, 67.2 per cent of the average income of agricultural households came from cultivation and livestock rearing. That share is even lower, at 43.1 per cent, in the recent NABARD survey.
  • The NSSO survey reckoned the average monthly net income of agricultural households in India for 2012-13 at Rs 6,426. That figure in the NABARD survey for 2015-16 is Rs 8,931, an increase of 39 per cent over three years.
  • The higher share could be that the NSSO’s definition of “rural” did not extend to semi-urban centres with below 50,000 population, which made up 16 per cent of households in the One reason for NABARD survey.
  • The methodological differences notwithstanding, both surveys highlight the same fact (of rural India becoming less agricultural, both in terms of the share of families engaged in farming and a diversification of income sources even in their case).

 

Note

  • A doubling of incomes would require this to go up to Rs 17,862 by 2021-22, the target date set by the government.
  • It is significant to note that the doubling is with reference to agricultural household incomes, which could be from both farm and non-farm sources.

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