Farm labour wages on an average rose 17.3% a year between
2008-09 and 2012-13 compared with 6.2% in the preceding four years. The
popular reason given for this is the rural jobs guarantee scheme which
ensures 100 days of work to all poor households in villages. But another
reason is the
increasing shift of farm labourers to other sectors, so
much so that total agricultural labour has fallen from 238 million in
1999-2000 to 231 million in 2011-12. Rising rural wages have fed into
higher food prices and higher wages elsewhere leading to a wage-price
spiral.
Workers moving out of low-productivity agriculture into
manufacturing is part of the development process. But, as the chart
shows, the bulk of the movement has been to the construction sector,
which too has low productivity.
