AGRICULTURE GENERATES not even a quarter of rural household incomes in India. Even for so-called agricultural households, just over 43 percent of their average income comes from the cultivation of crops and rearing of animals, according to the National Bank for Agriculture & Rural Development’s (NABARD) All India Rural Financial Inclusion Survey 2016-17.
The survey reinforces a trend that has gathered momentum since the start of this century — of an increasingly less ‘Krishi’ in ‘Bharat’. While agriculture may, by definition, be largely rural, the converse, though, isn’t true. The NABARD survey estimates the total number of rural households in India for 2016-17 at 21.17 crore. The definition of “rural” is a broad one, covering revenue villages and semi-urban centers with a population of less than 50,000. Out of the 21.17 crore rural households, 10.07 crore, or under 48 percent, are “agricultural” — those with at least one member self-employed in farming and reporting an annual value of production at more than Rs 5,000. The remaining 11.10 crore households or 52 percent are “non-agricultural”.
According to the survey, whose reference period is 2015-16, the average net monthly income of Indian rural households — after deducting expenses incurred in the course of economic activity — was Rs 8,059. The highest share of this (Rs 3,504) was accounted for by wage labor (both farm and non-farm), which was followed by government or private service jobs (Rs 1,906). On the other hand, agriculture — i.e. income from crop cultivation and livestock rearing — contributed only Rs 1,832.
But what’s interesting is that even within “agricultural households”, the share of average income from cultivation and livestock rearing was just over 43 percent. The balance 57 percent income in their case, too, was from non-agricultural sources.
The NABARD survey not only reconfirms but magnifies, the findings of the National Sample Survey Office’s (NSSO) Situation Assessment Survey of Agricultural Households conducted for 2012-13. That survey had estimated agricultural households to constitute 57.8 percent of all rural households. One reason for the higher share could be that the NSSO’s definition of “rural” did not extend to semi-urban centers with below 50,000 population, which made up 16 percent of households in the NABARD survey.
In the NSSO survey, 67.2 percent of the average income of agricultural households came from cultivation and livestock rearing. That share is even lower, at 43.1 percent, in the recent NABARD survey. The methodological differences notwithstanding, both surveys highlight the same fact — of rural India becoming less agricultural, both in terms of the share of families engaged in farming and a diversification of income sources even in their case.
The NSSO survey reckoned the average monthly net income of agricultural households in India for 2012-13 at Rs 6,426. That figure in the NABARD survey for 2015-16 is Rs 8,931, an increase of 39 percent over three years. A doubling of incomes would require this to go up to Rs 17,862 by 2021-22, the target date set by the Narendra Modi-led National Democratic Alliance government. It is significant to note that the doubling is with reference to agricultural household incomes, which could be from both farm and non-farm sources.