Building rural resilience

Shift in rural incomes, with reduced dependence on pure cultivation, is an encouraging trend that helps pull out excess and disguised labour from the sector

- DIPTI DESHPANDE SHARVARI RAJADHYAKSHA

WHEN IT POURS, agriculture reigns. A copious south-west monsoon and larger kharif acreage mean India's "agriculture and allied activity" sector would sprout at a healthy clip this fiscal.

The government's second-quarter estimate of 3.5% growth for the sector—the fastest in five quarters—underlines the upturn. Adequate rains pay off too, by replenishing groundwater and reservoirs, which benefit the winter, or rabi, crops. Such a material rebound in farm growth from the last fiscal year's emaciated 1.4% bodes well for rural incomes and can stoke private consumption, which had crimped last fiscal on sluggish demand in the hinterland.

Adverse weather events in recent years have repeatedly caused stress in rural areas because cultivation continues to be the primary source of household incomes. But what is salutary is that rural households have been trying to safeguard by diversifying their income streams. There has been a distinct decline in their dependence on agriculture (or pure cultivation) incomes, while that from livestock rearing and wage labour (including construction work) is rising.

According to a National Sample Survey Office report, between 2013 and 2019, the share of cultivation in total agricultural household income fell from 48% to 37%, while that of wage labour rose from 32% to 40% and that of livestock rearing from 12% to 16%. A National Bank for Agriculture and Rural Development (Nabard) survey also points to a surge in diversification of income sources to attain resilience. In 2021, 56% of agricultural households surveyed reported three or more sources of income, up from 35% in 2017.