Decline in Relative Income of Agricultural Population in India: Evidence and Casual Factors

Published by: Admin

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Authors: H S Shergill

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Abstract

Relative income of agricultural population is ratio of per capita income of agricultural population and per capita income of non-agricultural population. Relative income of agricultural population in India declined from 46 percent in 1951-52 to 18 percent in 2011-12. In developed countries also relative income of agricultural population declined upto second world war. Lower return on capital invested in agricultural machinery, lower productivity of permanent labour employed in agriculture, secular decline in agricultural terms of trade, and slow outmigration of surplus agricultural labour to urban jobs, are the main causes of decline in relative income of agricultural population. Relative income of agricultural population was pushed upto parity level in developed countries by closing years of 20th century by active government support policies. In the absence of active government support policies relative income of agricultural population in India will decline further in the coming years.

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