Long-run trends in rural wages: 

Long-run trends in rural wages: 

Context:

• Rural wages in India over the past few years seem to have been ignored.
• This collapse and stagnation deserves a closer look than it has received thus far.

Rural economy in India: An overview:

• India is known as an agricultural country, as most of the population of villages depends on agriculture. Agriculture forms the backbone of the country’s economy.
• The agricul­tural sector contributes most to the overall economic development of the country.
• But the Indian agricultural sector is heavily prone to the vagaries of the monsoon and hence, excessive drought or rainfall are the order of the day.
• This leads to failure of crop leading to poverty, instability  and farmers distress in a large number.
• The small and borderline  farmers,hence, have to look for other sources of income and form a large part of the manual labour in nearby cities.

Commercialization of Agriculture:

• In the present days, a large part of rural economy has been opened up, which has made commercialization of agricul­ture possible.
• This has also made the average farmer more prone  to the price fluctuations in the commodities market.
• Excessive reliance on wheat and rice and the successful implementation of the MSP’s only for these two, have also added to the vows of the farmers.

Rural Society and  Urbanism:

• Many industries have been flourished in rural areas, depriving the farmers of the agricultural land. This problem is aggravated when the farmers are not adequately compensated for the loss of land due to lack of effective land acquisition laws.
• Urbanism also brought development of rural roads and transport and communication.
• Contacts with the urban areas have created awareness among the rural masses about consumer goods.
• Also, due to green revo­lution, the income levels of the rural people have increased, which encourages such consumption of goods possible.

Government initiatives:

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):

• MGNREGA attempts to address two of the key concerns related to poverty in India: unemployment and a flagging agriculture sector.

The present policy frame of MGNREGA is based on three-pronged accomplishment to alleviate and reduce poverty in the country which constitutes:

• Stepping up of economic growth
• Direct strike on poverty through employment, income-generating programmes and assets creation for the poor and
• Human and social development policies for the poor and the needy.

Deen Dayal Upadhyaya Grameen Kaushalya Yojana or DDU-GKY:

• It is Government of India youth employment scheme.
• It aims to target youth, under the age group of 15–35 years. DDU-GKY is a part of the National Rural Livelihood Mission (NRLM), tasked with the dual objectives of adding diversity to the incomes of rural poor families and cater to the career aspirations of rural youth.

Prime Minister’s Employment Generation Programme (PMEGP):

• Jobs created by the Prime Minister’s Employment Generation Programme (PMEGP), generates employment in rural and urban areas by initiating new micro enterprises and small projects.
• Startup India: Under this programme, the government encouraged banks to provide finance to young entrepreneurs to start their own business ventures.

What are the problems of rural wages?

• Lower income of the people in rural areas is because of the low prices of agricultural products.
• Most new jobs in the rural are for unskilled workers, so the wages and nature of the work are unattractive.
• There is a strong gender disparity, where the female worker is paid only 70% of what the male worker earns.
• With the advent of Green Revolution, money wage rates started increasing, but with the raise of prices, real wage rates did not increase.
• Increase in wages, unaccompanied by productivity increases, could lead to a wage-price spiral, thereby offsetting the positive impact of initial increase in real wages on welfare.
• If increase in wages in one sector leads to subsequent increase in wages across the economy, the competitiveness of the economy could be negatively impacted.

What are the drawbacks of rural wages programmes in India?

• Objectives of one program conflict with those of others, and there is no institutional mechanism for reconciling them.
• Poor norms of fixation, enforcement, implementation and coverage in various parts of the country are other important drawbacks.
• Different wages are fixed for the same work in different sectors. Thus there is no justification of labour cost.
• The funds which are allotted for a particular wage program is not supervised. Hence, it is not used with honesty.
• There is ardent insufficiency of manpower, training and efficiency to run these rural wages programmes.