Monthly data on wage rates for agricultural and rural labour for the whole year 2010–11 are now available in the Indian Labour Journal published by the Labour Bureau, Government of India. In this note we consider the updated from Wage Rates in Rural India (WRRI) data till June 2011, which enables us to look at the movement of wage rates after 2009–10.

Following the methodology of our previous note,² we have examined trends in rural wage rates for five farm operations – ploughing (male), sowing (male), weeding (female), transplanting (male and female), and harvesting (male and female), and four non-farm occupations – carpenter (male), blacksmith (male), mason (male), and unskilled labour (male and female). The average annual (agricultural year) wage rates for agricultural and rural labour were first calculated for all operations and occupations. To reduce the bias due to unreported sample villages, only those years in which data for more than six months were available were taken into account. The consumer price index for agricultural labourers (CPIAL) (1986–87=100) and consumer price index for rural labourers (CPIRL) (1986–87=100) were used to deflate wage rates for agricultural labour and rural labour, respectively. The real wage rates (at 1986–87 prices) for agricultural and rural labour are given in Tables 1-A and 1-B.

We reiterate that all trends and results reported here are derived from the sources of official data cited above.

It may be seen from the Tables that real wage rates (at 1986–87 prices) for agricultural labour have risen substantially since 2007–08. At the all-India level, the seven years between 1999–2000 and 2006–07 witnessed a stagnant or slightly declining trend in real wage rates for major farm operations. The real wage rate for ploughing (male) was Rs 21–22; for weeding (female), Rs 13; for transplanting (male and female), Rs 17–18 and Rs 14–15 (respectively); and for harvesting (male and female), Rs 18 and Rs 15 (respectively). It is probable that a decline in agricultural production during these years, due to drought conditions, was partly responsible for the stagnation or decline in agricultural wages. Thus, the period in which the Indian economy as a whole grew rapidly was a period that was extremely unfavourable for agricultural labourers.

The trend changed, however, in 2007–08, and the wage rates for agricultural labour began to rise.  This rise in real wage rates could be seen in all States other than Gujarat, Meghalaya, and Tripura; for almost all farm operations; and for both males and females.

Table 2 presents the average annual growth rates of real wages between 2007–08 and 2010–11 for rural farm and non-farm occupations in selected States of India. Orissa had the highest growth rate for most operations, followed by Andhra Pradesh, Tamil Nadu, and Punjab. A substantially high growth rate for agricultural wages was also recorded in States such as Bihar, Maharashtra, Madhya Pradesh, and Uttar Pradesh. It is remarkable that agricultural wages grew so fast in those previously low-wage States. The only exception among the selected States, where real wage rates for agricultural labour declined, was Gujarat. Some north-eastern States, like Meghalaya and Tripura, also recorded a decline.

The record of wage rates for rural labour during these three years is rather mixed. The wage rates for skilled labourers, like carpenters, blacksmiths, and masons, recorded a high growth rate (6–11 per cent) in Tamil Nadu and Andhra Pradesh, and a moderately high rate (3–6 per cent) in Bihar, Jammu and Kashmir, Kerala, and Uttar Pradesh. In the remaining 10 States, however, the real wage rates for skilled labour grew very slowly or declined.

In contrast, the wage rates for unskilled labour rose substantially in most States other than Gujarat, Meghalaya, and Tripura, which is very similar to the pattern for agricultural labour. Let us look more closely at the movement of real wage rates for unskilled labour during the last decade. At the all-India level, the real wage rate was at its peak in 1999–2000, at Rs 18.34 and Rs 14.46 for males and females respectively. Then it declined substantially in 2000–01 and remained almost stagnant until 2006–07. The trend changed in 2007–08, when the wage rate started rising. The annual rate of growth for males was 2.2 per cent in 2007–08, 6.6 per cent in 2008–09, 2.9 per cent in 2009–10, and 10.6 per cent in 2010–11; and 3.3 per cent, 6.9 per cent, 3.3 per cent, and 10.4 per cent during the same period for females. When it comes to regional variations in the annual rate of growth from 2007–08 to 2010–11, the top three States for males were Orissa (11 per cent), Tamil Nadu (11 per cent), and Andhra Pradesh (10 per cent); and, for females, Orissa (15 per cent), Andhra Pradesh (10 per cent), and Bihar (10 per cent). Only Gujarat, Meghalaya, and Tripura recorded negative rates for both males and females.

The sudden change in trends in real wage rates for agricultural and unskilled non-farm labour that emerges from the Labour Bureau’s WRRI data raises several questions. What was the major factor influencing the trend? Was it the impact of the Mahatma Gandhi National Rural Employment Guarantee Scheme that brought about the change? Why then was there no change in Gujarat, Meghalaya and Tripura? What was the effect on the rural poor of the rising trend in real wage rates that is reflected in WRRI data? These require a thorough examination of rural labour markets, a subject for future study.

Keywords: agri­cul­tural wages in India, wage rates for rural labour­ers, MGN­REGA, male–fe­male wage gap.