Rural Transformation and Workforce Dynamics
It is well known—and almost axiomatic in mainstream theories of structural
transformation—that as an economy progresses through ‘modern economic
growth’, its reliance on the primary sector, particularly agriculture, tends to
decline, both in terms of output and workforce share. While this trend has been
reflected in agriculture’s declining contribution to national income, most countries
in the Global South, including India, have not experienced a corresponding drop
in agricultural employment. Since independence, India’s transition from a lowpaid
agricultural workforce to higher-productivity sectors such as industry and
manufacturing has been sluggish. It was argued that market-oriented reforms
and policies would accelerate this transformation, with the private sector driving
economic growth and the government playing a regulatory and facilitative role.
However, the expected shift has not materialised to large extent as anticipated.
In spite of progress, there are also signs of concerns in rural India. Wage growth has
been negligible, and the share of the workforce engaged in agriculture, contrary
to the slow and steady trend witnessed earlier, has not only remained high but
has even increased in recent years. Additionally, self-employment—often a form
of disguised unemployment or subsistence earnings—has risen sharply after the
shock of the COVID-19 pandemic.
Rural transformation has occurred on multiple levels. Agriculture’s role in shaping
the labour market has diminished. This is partly due to structural changes in
agricultural production driven by increasing mechanisation and monetisation of
the agrarian and rural economy. It is also influenced by shifts in the rural nonfarm
sector, which has become increasingly integrated with the broader economy
through urbanisation, migration, and enhanced connectivity. These changes have
had far-reaching implications for the social and economic fabric of villages. The
economic transformation, combined with social and economic hierarchies, has
led to unequal distribution of the benefits of structural change. Simultaneously,
the weakening and dismantling of agrarian production systems have reshaped
class and social relations. Previously marginalised groups, such as Scheduled
Castes (SCs), have leveraged new opportunities to enhance their bargaining
power in the labour market, though they remain excluded from ownership and
control of production systems. The emerging class contradictions demand a new
lens for understanding rural transformation and its impact on labour markets.
Another key factor shaping the labour market is public policy—both through
active intervention and, in many areas, its conspicuous absence. A prominent
example of state intervention is the Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA), which has played a critical role in providing
employment to the most vulnerable segments of the rural population. While it
initially helped raise rural wages, it has faced pushback from state governments
in recent years. MGNREGA proved to be a lifeline for vulnerable workers during
periods of economic shock such as droughts, demonetisation, and, crucially, the
COVID-19 pandemic. However, it has not empowered rural labour to demand
better wages and working conditions in recent years.
There is also a lack of clarity on the drivers behind the recent rise in female
labour force participation in rural India, particularly in agriculture but also in nonagricultural
sectors. This phenomenon needs to be thoroughly investigated for its
role in rural transformation and well-being of women workers.
Finally, the rural economy is now more integrated with the urban and global
economies—not just in terms of production structures but also through financial
linkages. These integrations have introduced new methods, technologies, and
global value chain connections into the rural economy. However, they have also
introduced new risks related to production and marketing. These developments
have led to new forms of labour relations and land tenancy in agriculture, as well
as changes in the organisation and production of non-farm goods and services.
All these clearly necessitates a fundamental reassessment of India’s development
trajectory. The country must adopt a more nuanced approach to economic
policymaking—one that emphasises long-term planning, robust state intervention
in critical sectors, and ensures that growth translates into real improvements
in wages and employment. At this juncture, revisiting and rethinking economic
policies is not just desirable, but essential.
Given this backdrop, some select themes and issues that the prospective paper
writers may wish to explore include:
- What are the trends in multi-tasking or pluri-activity by large segments of
workers, in rural India; and their patterns and dynamics?
- What are the recent trends in non-farm employment and dynamics over
time?
- What is happening to migration (rural to urban/rural to rural) and their
implications for rural economy? Has reverse migration stopped after Covid?
What are their implications for wages, income and labour relations?
- How have intergenerational aspirations among rural youth influenced
migration decisions, education choices, and engagement with agriculture?
- The recent increase in women’s workforce participation are subsistence led
or expanding opportunities?
- What are the linkages between caste dynamics and the world of work and
patterns in participation, remuneration, and socio-economic security?
- Are there serious mismatches between demand and supply of skills and
employment generation in rural areas?
- How has rural financialisation (microfinance, digital credit, SHGs) altered
labour relations and household economic strategies in rural India?
- In what ways has mechanisation in agriculture contributed to shifts in intrahousehold
labour dynamics, particularly across caste and gender lines?
- How has the integration of rural economies with global value chains impacted
traditional artisanal, craft, or local production systems?
- What are the long-term implications of rural housing, public services, and
informal employment networks?
- To what extent have digital technologies and platform-based gig work
penetrated rural areas, and what are their effects on employment patterns?
- How do environmental factors (e.g., climate variability, land degradation)
intersect with rural employment challenges?
- What is the impact of public investment in rural infrastructure and irrigation
on labour absorption in agriculture and allied sectors?
- What are the regional disparities in rural labour market transformations, and
how do state-specific policies (or the lack thereof) mediate these changes?