Agricultural wages in India: Trends and structural changes

Abstract

In India, the rural labour market is transitioning from the agricultural to non-agricultural sectors. This transition is accompanied by the changes in agricultural wages and labour availability for farm operations due to employment generation schemes like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) or the disequilibrium in the labour market due to the COVID pandemic. This study has analyzed the trajetorey of agricultural wages and has assessed the impact of MGNREGS and Lockdown to curb COVID infections on these wages at the national and sub-national levels. The study has used the gender-disaggregated monthly labour wages data for three major agricultural operationsharvesting, sowing, and ploughing for the period 1995-2022. The results have revealed a structural change, seasonality, and disparity in agricultural wages across gender and states. Further, the ARIMA-intervention modelling has indicated that the implementation of MGNREGS from 2006 to 2008 contributed significantly to the sharp increase in the real farm wages, and its impact increased over time. The imposition of Lockdown to curb the COVID infections did not cause any significant impact on agricultural wages. Thus, the COVID-led disequilibrium in labour market was only short-lived without any significant impact on agricultural wages in India.