Rural earnings have dropped sharply since November 2014.
An RBI paper shows wages in the farm and non-farm sectors have grown 5.6% and 6.5%, respectively, in the last three-and-a-half years, down from 17% and 15% between October 2007 and October 2013. The reason? The underperformance of the Mahatma Gandhi National Rural Employment Guarantee Scheme. “This phase is also characterised by low inflation occasionally surpassing growth in nominal rural wages,” the report adds. Other factors that contributed to the slide: a steep fall in prices of food and
agricultural commodities, and back-to-back
droughts in 2014-15 and
2015-16.
