Rural Labour in Transition: Real Wage Trends in India Since early 1980s

This paper analyses the evolution of real wages among rural labour in India from 1983 to 2023–24, focusing on the bottom 40 percent of the rural population with respect to monthly per capita consumption expenditure. Using unit-level data from NSSO employment rounds and the PLFS, and deflating earnings by the CPIAL, the paper estimates comparable daily real wages for regular and casual workers. The findings show a broad long-run rise in real wages after the late 1980s, with stronger gains between the early 1990s and 2011–12 than in the subsequent period. Over time, the wage gap between regular and casual workers narrowed in many states, but this narrowing often coincided with declining labour-force participation, a rising out-of-labour-force population, and growing volatility in the post-2011 period. Gender disparities remained persistent, and state-level patterns were highly uneven. The findings suggest that rising real wages among those employed should not be treated as sufficient evidence of improving labour-market conditions. Instead, they need to be interpreted alongside wider changes in agrarian performance, labour-force participation, sectoral shifts and the distribution of employment opportunities.

Rural labour; real wages; casual labour; regular workers; rural labour markets; wage inequality.

1. Abraham, R., Basole, A., & Kesar, S. (2022). Down and out? The gendered impact of the Covid-19 pandemic on India’s labour market. Economia Politica, 39, 101–128. [Google Scholar] [Crossref]

2. Aggarwal, S. C. (2023). The status of self-employed and casual workers in India: Some recent changes due to COVID-19 [SSRN working paper]. SSRN. [Google Scholar] [Crossref]

3. Arora, A. (2023, October 17). Making sense of recent developments in the Indian labour market. The India Forum. [Google Scholar] [Crossref]

4. Bhalla, S. (2023, April 25). Contrary to claims, rural wages have risen rapidly. The Indian Express. [Google Scholar] [Crossref]

5. Carswell, G., & De Neve, G. (2014). MGNREGA in Tamil Nadu: A story of success and transformation? Journal of Agrarian Change, 14(4), 564–585. [Google Scholar] [Crossref]

6. Chakravarty, D., & Bose, I. (2011). Industry, labour and the state: Emerging relations in the Indian state of West Bengal. Journal of South Asian Development, 6(2), 169–194. [Google Scholar] [Crossref]

7. Chand, R. (2006). India’s agricultural challenges and their implications for growth and equity. Paper presented at the Silver Jubilee Seminar on Perspectives on Equitable Development, Centre for Economic and Social Studies, Hyderabad. [Google Scholar] [Crossref]

8. Chand, R., & Srivastava, S. K. (2014). Changes in the rural labour market and their implications for agriculture. Economic and Political Weekly, 49(10), 47–54. [Google Scholar] [Crossref]

9. Chandrasekhar, C. P., & Ghosh, J. (2023, April 30). Wages of casual and self-employed workers in India. Janata Weekly. [Google Scholar] [Crossref]

10. Chaudhary, R., & Verick, S. (2014). Female labour force participation in India and beyond [ILO Asia-Pacific Working Paper]. [Google Scholar] [Crossref]

11. Das, A. (2018). Trends, composition and determinants of rural non-farm employment in Assam and its implication for rural income distribution. In Employment and labour market in North-East India. Routledge India. [Google Scholar] [Crossref]

12. Das, A., & Drèze, J. (2024, July 26). The problem of India’s stagnant real wages. Ideas for India. [Google Scholar] [Crossref]

13. Das, A., & Usami, Y. (2017). Wage rates in rural India, 1998–99 to 2016–17. Review of Agrarian Studies, 7(2), 4–38. [Google Scholar] [Crossref]

14. Das, A., & Usami, Y. (2024). Downturn in wages in rural India. Review of Agrarian Studies, 13(2). [Google Scholar] [Crossref]

15. Deb, D. (2017). Impact of MGNREGA on rural livelihood of Assam. International Journal of Application or Innovation in Engineering & Management, 6(8), 141–146. [Google Scholar] [Crossref]

16. Deshpande, A. (2022). The Covid-19 pandemic and gendered division of paid work, domestic chores and leisure: Evidence from India’s first wave. Economia Politica, 39(1), 75–100. [Google Scholar] [Crossref]

17. Deshpande, R. S., et al. (2001). Indebtedness among the agricultural laborers from deprived castes: Towards an explanation. Arthavijana, 43(1–2), 159–172. [Google Scholar] [Crossref]

18. Dev, S. M. (2001). Reforming the rural non-farm sector. The Hindu. [Google Scholar] [Crossref]

19. Dev, S. M., & Sengupta, R. (2022). Covid-19 pandemic: Impact, recovery, and the road ahead for the Indian economy (IGIDR Working Paper No. 2022-016). Indira Gandhi Institute of Development Research. [Google Scholar] [Crossref]

20. Eswaran, M., et al. (2009). Sectoral labour flows and agricultural wages in India, 1983–2004: Has growth trickled down? Economic and Political Weekly, 44(2). [Google Scholar] [Crossref]

21. Himanshu. (2011). Employment trends in India: A re-examination. Economic and Political Weekly, 46(37). [Google Scholar] [Crossref]

22. Himanshu. (2017). Growth, structural change and wages in India: Recent trends. Indian Journal of Labour Economics, 60(3), 309–331. [Google Scholar] [Crossref]

23. Himanshu. (2019). The seriousness of the problem of unemployment in India. Livemint. [Google Scholar] [Crossref]

24. Himanshu. (2024). Dynamics of change in rural India. Economic and Political Weekly, 59(43). [Google Scholar] [Crossref]

25. International Labour Organization. (2018). India wage report: Wage policies for decent work and inclusive growth. International Labour Organization. [Google Scholar] [Crossref]

26. International Labour Organization. (2022). World employment and social outlook: Trends 2022. International Labour Organization. [Google Scholar] [Crossref]

27. Jha, B. (2006). Employment wages and productivity in Indian agriculture (Working Paper No. E/266/2006). Institute of Economic Growth. [Google Scholar] [Crossref]

28. Jha, P. (2007). Some aspects of the well-being of India’s agricultural labour in the context of contemporary agrarian crisis. Indian Journal of Labour Economics, 49(4), 741–764. [Google Scholar] [Crossref]

29. Jha, P. (2013). Labour conditions in rural India: Reflections on continuity and change. In C. Oya & N. Pontara (Eds.), Rural wage employment in developing countries: Theory, evidence and policy. Routledge. [Google Scholar] [Crossref]

30. Jose, A. V. (1988). Agricultural wages in India. Economic and Political Weekly, 23(26). [Google Scholar] [Crossref]

31. Kannan, K. P., & Raveendran, G. (2019). From jobless to job-loss growth: Gainers and losers during 2012–18. Economic & Political Weekly, 54(44), 38–44. [Google Scholar] [Crossref]

32. Kataria, N. (2021). An assessment of the nutritional status of India’s rural labour since the early 1980s. Economic and Political Weekly, 56(50), 35–44. [Google Scholar] [Crossref]

33. Kaur, R., & Nagaich, S. (2021). Growth of female labour force participation by occupation in the economy of Himachal Pradesh [SSRN working paper]. SSRN. [Google Scholar] [Crossref]

34. Kesar, S., Abraham, R., Lahoti, R., Nath, P., & Basole, A. (2021). Pandemic, informality, and vulnerability: Impact of COVID-19 on livelihoods in India. Canadian Journal of Development Studies, 42(1–2), 145–164. [Google Scholar] [Crossref]

35. Kumar, N., & Pandey, A. (2021). Impact of rural non-farm employment on migration in Uttar Pradesh. Shodh Drishti, 12(1), 211–218. [Google Scholar] [Crossref]

36. Kundu, S. (2019). Rural wage dynamics in India: What role does inflation play? RBI Occasional Papers, 40(1), 51–84. [Google Scholar] [Crossref]

37. Mehrotra, S., & Parida, J. K. (2017). Why is the labour force participation of women declining in India? World Development, 98, 360–380. [Google Scholar] [Crossref]

38. Mehrotra, S., & Parida, J. K. (2019). India’s employment crisis: Rising education levels and falling non-agricultural job growth (CSE Working Paper 2019-04). [Google Scholar] [Crossref]

39. Menon, R. (2023, October 22). Have earnings grown post-pandemic? The Hindu. [Google Scholar] [Crossref]

40. Ministry of Rural Development. (2022). Annual report 2021–22. Government of India. [Google Scholar] [Crossref]

41. Ministry of Rural Development. (2024). MGNREGA annual report 2023–24. Government of India. [Google Scholar] [Crossref]

42. Mohanakumar, S., & Kumar, R. V. (2018). Rural labour market and farmers under MGNREGA in Rajasthan. Indian Journal of Labour Economics, 61(1), 131–155. [Google Scholar] [Crossref]

43. Mukherjee, S., & Mukherjee, S. (2020). Kanyashree Prakalpa in West Bengal: Desirability and promises. Journal of Indian Education, 46(2), 177–184. [Google Scholar] [Crossref]

44. National Bank for Agriculture and Rural Development. (2023). State focus paper: Maharashtra 2024–25. NABARD. [Google Scholar] [Crossref]

45. Narayanamoorthy, A., & Bhattarai, M. (2013). Rural employment scheme and agricultural wage rate nexus: An analysis across states. Agricultural Economics Research Review, 26(2), 149–163. [Google Scholar] [Crossref]

46. Odisha Economic Survey. (2024). Odisha economic survey 2023–24. Government of Odisha. [Google Scholar] [Crossref]

47. Patnaik, U. (2004). The republic of hunger [Public lecture]. SAHMAT, New Delhi. [Google Scholar] [Crossref]

48. Patnaik, U. (2008). Rusticus loquitur: Peasant travails and survival in the era of globalization [D. D. Kosambi Memorial Lecture]. Pune. [Google Scholar] [Crossref]

49. Raveendran, G., & Vanek, J. (2020). Informal workers in India: A statistical profile. WIEGO. [Google Scholar] [Crossref]

50. Reddy, D. N. (2006). Economic reforms, agrarian crisis and rural distress [Memorial lecture]. Kakatiya University. [Google Scholar] [Crossref]

51. Reddy, T. P., & Babu, V. S. (2018). Impact of MGNREGS on rural labour markets and agriculture: A study of Madhya Pradesh. In Current issues in the economy and finance of India (pp. 187–205). Springer. [Google Scholar] [Crossref]

52. Review of Agrarian Studies. (2019). Stagnation in rural wage rates [Editorial]. Review of Agrarian Studies, 9(1). [Google Scholar] [Crossref]

53. Sahay, G. R. (2010). Globalization, liberalization and agrarian distress: A study of suicides among farmers in India. Paper presented at the VI Global Labour University Conference, Berlin. [Google Scholar] [Crossref]

54. Sen, A., & Bhatia, M. S. (2004). State of the Indian farmer: A millennium study—Cost of cultivation and farm income (Vol. 14). Academic Foundation. [Google Scholar] [Crossref]

55. Sen, A., & Himanshu. (2005). Poverty and inequality in India: Getting closer to the truth. In A. Deaton & V. Kozel (Eds.), Data and dogma: The great Indian poverty debate (pp. 306–370). Macmillan. [Google Scholar] [Crossref]

56. Sharma, H. R. (2005). Economic conditions of agricultural labour households in 1990s: A state level analysis of wage earnings and indebtedness. The Indian Journal of Labour Economics, 48(2), 425–436. [Google Scholar] [Crossref]

57. Sharma, V., Meena, G. L., Singh, H., Sharma, L., Upadhayay, B., & Yadav, K. K. (2020). Analysis of casual labour in Rajasthan vis-a-vis India. Economic Affairs, 65(3), 433–438. [Google Scholar] [Crossref]

58. Singh, S., & Bhogal, S. (2014). Depeasantization in Punjab: Status of farmers who left farming. Current Science, 106(10), 1364–1368. [Google Scholar] [Crossref]

59. Singh, S., & Bhogal, S. (2020). Punjab’s agricultural labourers in transition: A longitudinal study of three decades. Economic and Political Weekly, 55(26–27). [Google Scholar] [Crossref]

60. Singh, A., Kataria, N., & Sharma, S. (2023). A macro analysis of changing labour market dynamics in Tamil Nadu after the economic reforms of 1991. International Journal of Research Publication and Reviews, 4(5), 3098–3104. [Google Scholar] [Crossref]

61. Singh, S., & Kumar, A. (2024). Rural employment in Himachal Pradesh. IOSR Journal of Economics and Finance, 15(2), 61–65. [Google Scholar] [Crossref]

62. Srivastava, R. (2019). Emerging dynamics of labour market inequality in India: Migration, informality, segmentation and social discrimination. The Indian Journal of Labour Economics, 62(2), 147–171. [Google Scholar] [Crossref]

63. Usami, Y. (2011). A note on recent trends in wage rates in rural India. Review of Agrarian Studies, 1(1). [Google Scholar] [Crossref]

64. Usami, Y. (2012). Recent trends in wage rates in rural India: An update. Review of Agrarian Studies, 2(1). [Google Scholar] [Crossref]

• Impact of Foreign Direct Investment in India
• Issues Involved in Digitalisation Special Reference to Indian Tourism Growth
• Relationship Marketing and Customer Loyalty in the Fast-Moving Consumer Goods (FMCG) Industry in Nairobi County
• Financial Literacy or Financial Inclusion? Which is Which, What is What—To Achieve Uganda’s 10-Fold Economic Growth By 2040
• Harnessing Natural Gas for Economic Transformation: Overcoming the Regulatory and Infrastructural Bottlenecks in Nigeria