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Author(s): M. Mukherjee
Source: Indian Journal of Industrial Relations, Vol. 9, No. 4 (Apr., 1974), pp. 563-585
Published by: Shri Ram Centre for Industrial Relations and Human Resources
Stable URL: http://www.jstor.org/stable/27765410
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SHARE OF AGRICULTURAL LABOUR
IN NATIONAL INCOME
M. MUKHERJEE
IN this
of thepaper, we share
distributive make a courageous
of agricultural labourattempt
in national to build up a series
income
originating in the agriculture sector for the post-independence
period. For this, we have examined and summarized the work done
by a number of research workers in the field. But we have also used
some estimates of number of workers and average earnings per
worker of cur own both at current and at constant prices and
studied the changes in the shares as well as in the real average
earnings against various indicators of growth of Indian agriculture.
The attempt is perhaps foolhardy, because the available statistics
are grossly inadequate for the purpose, and the final results pre
sented depend partly on imaginative manipulation of existing in
formation. The main difficulty about available data is that they not
only lack in coverage in respect of the field we intend to cover, but
also are inconsistent. Different parts of the statistics do not tell the
same story. In view of this, a partly imaginative exercise like this is
needed in order that a logically coherent story can be presented.
The results, right or wrong, will show the kind of aggregative statis
tics we need, and may help the suppliers of data in future. As a
consequence of the unsatisfactory nature of the statistical base, I
have not presented my results in neat tables with brief notes on
sources used and methods adopted. I have, instead, tried to tell the
whole story, disclosing all the skeletons in my cupboard.
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564 M. MUKHERJEE
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 565
rest of the world. Coming to the basic concepts to be used for obtain
ing the shares, we have used the share on aggregate agricultural
income in a systematic way, because agricultural income is directly
linked with labour input in agriculture whose return is the share
of agricultural labour. We have also used agriculture income less
the income of the self-employed for reasons discussed in the last para
graph. Since urban agricultural income is very small (see Table 2),
there is little gain in trying to link the income of agricultural labour
with rural agricultural income. In any case, the available estimates
of factor breakdowns for agriculture are for the sector as a whole
and not for rural agriculture alone. But there is some point in trying
to link the labour income in agriculture with aggregate rural in
come, and to study the changes in the ratio of agricultural labour's
income to aggregate rural income, and this we have tried for one or
two points of time permitted by available data.
We may next consider the possible numerators for calculation
of the shares. As we have already pointed out, the available esti
mates of factor breakdowns give the income of the agricultural
labourers, and make no distinction as to whether they are landed or
landless. But there are survey estimates at certain points of time
giving the proportions of landed and landless agricultural labour
households and their average earnings and hence it is possible to
obtain a rough breakdown of the labour share in agricultural in
come into shares accruing to landed and landless labour and we have
attempted this separation at one or two points of time.
As it is well known agricultural labourers obtain a part of their
income from agricultural operations and a part from other rural
non-agricultural pursuits. In fact, a suitable analytical category
would be rural labour and it will be of interest to study the changes
in the share of their income in NDP originating in rural areas. It is
not possible, however, to do this because the available estimates of
distribution by factor shares are at the national level. A most inter
esting study would be to try to prepare a factor breakdown of natio
nal income separately for urban and rural areas, which would auto
matically give an estimate of aggregate rural income broken down
by several industrial categories. But until this is done for at least
some points of time, it will be hazardous to employ the framework
for analytical purposes.
When we come to the stage of average earnings, it becomes
necessary to distinguish between two types of averages. One could
analyse either agricultural labour household. Both concepts are
relevant. When one is interested in the magnitude of labour input
in agriculture, the former concept is obviously more cogent. When,
on the other hand, we are concerned with the level of living, the
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566 M. MUKHERJEE
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 567
Having obtained the estimates in real terms for the period 1950
51 to 1968-69, we have used the conventional deflators, for agricul
ture and non-agriculture separately for the period 1950-51 to
1959-60 to obtain the estimates of agriculture and non-agricultural
sectors at current prices. These when added give the NDP at current
prices. We have made the NDP and national income estimates con
sistent by making a slight adjustment of the type we made in the
case of the series at constant prices.
The estimates obtained in the manner and used subsequently in
our study are presented in Table 1.
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568 M. MUKHERJEE
1950-51
Agriculture 4911 4740 171 100.00 96.52 3.48
Non-agriculture 3908 1711 2197 100.00 43.78 56.22
Total 8819 6451 2368 100.00 73.15 26.85
1960-61
Agriculture 6821 6665 156 100.00 97.71 2.29
Non-agriculture 6545 2386 4159 100.00 36.45 63.55
Total 13366 9051 4315 100.00 67.72 32.28
1968-69
Agriculture 14502 14284 218 100.00 98.50 1.50
Non-agriculture 14443* 4330 10104 100.00 30.00 60.00
Total 28936 18614 10322 100.00 64.33 35.67
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 569
VI. DISTRIBUTION OF NATIONAL INCOME BY FACTOR SHARES
Like the urban-rural breakdown, Indian official national income
statistics do not furnish any estimate of the factor distribution of
national income and here again we have to rely on studies made by
private research workers. Except for the latest studies on the topic,
all the previous work has been summarized by Mukherjee,5 who has
attempted an appraisal of the material and indicated the principal
findings. It is not necessary to go over this material again. The
material covered there relates to estimates by different authors for
one or more years during the period 1948-49 to 1957-58, a study
by Narayanan and Roy covering the entire time horizon. Subse
quently, Weintraub has extended the series by Narayanan and Roy6
up to 1962-63. The most recent work relates to fresh estimates for
the period 1960-61 to 1964-65 Uma Roy Chowdhury released and dis
cussed in two papers.7 Using this material, it is possible to obtain a
series of factor distribution of NDP for the period 1950-51 to 1964-65,
and we have naturally done this.
This material, however, is not fully satisfactory and consequent
ly we have also worked out a series for the income of agricultural
workers only for the period 1950-51 to 1968-69 on the basis of pro
ximate estimates of the number of agricultural labourers and their
average earnings. It is important to note that the approximate method
used by us involves scaling up an aggregate labour income by an
index number of average earnings. Since this is the basic method
used for the detailed studies as well, there is no reason why our
method should give unrealistic figures, then the index numbers used
are realistic and have adequate coverage. Since we consider our
index numbers as more plausible than those implicit in the other
estimates, the findings are principally based on our estimates.
Estimates of the distribution by factor shares by several authors
give factor breakdowns for quite a number of industrial sectors. It
is, however, not necessary for us to consider all these details, and we
have accordingly presented the estimates of factor breakdowns of
NDP by the categories used by us earlier, that is, for the economy
as a whole as well as for the agriculture and the consolidated non
agricultural sector. While considerable details about Roy Chow
dhury's estimates are given in a recent paper (referred to in footnote
4), what we have done is to adopt her percentages from her IARIW
paper (footnote 7) and apply these to our income aggregates. Simi
larly, for the previous period, we have applied Narayanan and Roy's
and Weintraub's percentage factor shares on our aggregates to
arrive at the factor breakdowns.
All available estimates of factor breakdowns are at current
prices. But here estimates at current prices alone do not satisfy us
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570 M. MUKHERJEE
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CO >M o > o > > oa
tu 2> O H-1
oo en
Ar
26.16
25.90 27.26 33.60
33.70 32.67
33.34 31.47
33.03
Sr
35.89 33.22 27.80 22.75 23.75
22.54
35.81 31.57 27.20
24.05
38.55 41.41
38.60 43.58 44.43
40.42
Wr
38.0537.9538.29 39.2039.52 39.10 43.9144.78 44.78
Aa
18.31 18.57 20.23 17.94 17.84
17.59
In Ya of Sa 63.76
64.01 61.60
60.45 61.77
62.96 63.30 64.03
63.35 65.41
17.24
17.46 17.67 17.80
17.80
19.06 18.01
18.03
21.76 22.29
22.05 24.49 24.77 25.63 24.61
23.43 23.86 26.90
50.13
50.85 49.62 44.95
44.60
46.90 43.35
47.7446.1246.08
In Y of
Table 3. Percentage shares of factor distributions in India
43.8044.12 42.4043.3845.79
W
27.39 29.97
28.33 31.97
31.07
31.11
1950- 1951-
51 52
1952- 1953-
53 54
1954- 1955-
55 56
1956- 1957- 58
57 1959- 1960-
60 61 1962- 1963-
63 64
Year
1958- 59 1961- 62 1964- 65
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931899974
Aa 1084
1161
1112
1235 11891236
1216
12001234 12661477
1218
Sa 328333993453
37243566
36363900363841374072
43214406427745094936
1300 1119
5090520753955840 590261955889
6536
643368216881670268947517
Ya 5899
9126
93769733 1057610917
10339 11524 1227412522
11373 1385914155
13366 16081
14958
897910872990881857
Aa 10751250118112001286
1112
1308
1535 2000
3092340026402803
31673251 3283
3511 3913395543214517
4593 6708
5466
Sa
Table 4. Factor income flows in agriculture at current and at constant 1960-61 prices
847880867942867890954957
Wa 129613561500
13001272
11181112
Ya 49115041
4831 5315
5332436845505577 628162486821 10214
71978357
7055
88199248 87789270
90409887 1067811920
10828 12293
13338 20209
1498117208
14148
1950- 51 1954- 55
Year 1952- 1953-
53 54 1955- 56
1956- 57 1960- 1961-
61 62 1963- 1964-
64 65
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 573
sector.
Application of these percentages to aggregate NDP and NDP
arising in agriculture and non-agricultural sectors gives us the esti
mates of factor income flows for the years. In Table 4, we have done
this for the agriculture sector only, and applied the percentages not
only to the aggregates at current prices but also to those at constant
prices, the latter giving our approximations of the real factor income
flows in the agriculture sector.
Year Based on
census labour census labour census labour
force esti force but rural force but agr.
mates workers for workers for
1961-71 1961-71
1 2 3 4
The main difficulty here arises because the large rise in the
reported number of agricultural workers between 1961 and 1971
censuses is due to the fact that a number of persons who would have
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574 M. MUKHERJEE
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 575
VIII. EARNINGS OF AGRICULTURAL LABOURERS AND THEIR
CONSUMER PRICE INDEX NUMBER
Data on earnings of agricultural labourers are available in two
sources. The three surveys on agricultural labourers give considera
ble information on their average earnings. But the definition of agri
cultural labourers used in the three surveys differed from one
another and the survey results cannot be unequivocal on the changes
in the rate of earnings. Second, the survey results are available at
only three points of time ending in 1963-64. Third, the survey esti
mates are usually for agriculture labour households giving their
income (and also consumption expenditure) but income per worker
can be ascertained since data on number of earners in a household
are available. The other source comprises repetitive monthly data
on agricultural wages per day collected and released by the Ministry
of Food and Agriculture regularly. The data for different categories of
rural workers relating to a large number of centres by States are
released in mimeographed annuals, "Agricultural Wages in India",
and a small sample of this is published in the monthly "Agricultural
Situation in India". The latest issue of the annual is for 1965-66. How
ever, averages at the State level or at the national level are not
available in the regular publications. Luckily, quotations for ten
States: Andhra Pradesh, Assam, Bihar, Maharashtra, Kerala, Madras,
Mysore, Orissa, Punjab, and West Bengal for the period 1950-51 to
1959-60 are available in the form of State averages in one publica
tion.13 Very recently, similar estimates for these and some other
States have been given for 1956-57, 1960-61, and 1964-65 by Krish
na ji.14 Estimates for 1959-60 and 1968-69 for nine of these States
based on the limited data given in the "Agricultural Situation" have
been given by Lahiri15 in a paper released some time back. Under
the circumstances, we have obtained our series of average earnings
on the basis of the published information just described, supplement
ed by detailed work based on "Agricultural Wages in India" for these
ten States only for the years 1961-62, 1962-63, 1963-64, and 1965
66 and sample data for the years 1966-67 and 1967-68 taken from
"Agricultural Situation in India". Thus, our series of average
earnings relate to the period 1950-51 to 1968-69 being obtained as a
simple average of State averages. These figures are given in Table 6.
It may be noted that the estimates of earnings per day were first
converted into an index number series and then used in conjunction
with the first ALE results to give the annual averages. This is
necessary to bring the estimates of average earnings in line with the
estimates of income by factor shares.
As we have already observed, we are also interested in the
average earnings of landed and landless agricultural labourers sepa
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576 M. MUKHERJEE
rately. This material is available in both the Second ALE and in the
RLE and We have presented the relevant information in Table 7
culled from the paper of G. D. Rao and NSS report No. 134 referred
to earlier.
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 577
Year Index
1950- 51 93.46
1951- 52 95.51
1952- 53 94.49
1953- 54 96.67
1954- 55 93.46
1955- 56 90.37
1956- 57 95.98
1957- 58 98.60
1958- 59 99.91
1959- 60 100.84
1960- 61 100.00
1961- 62 101.21
1962- 63 106.17
1963- 64 113.38
1964- 65 130.93
1965- 66 150.56
1966- 67 174.39
1967- 68 194.39
1968- 69 188.88
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578 M. MUKHERJEE
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 579
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580 M. MUKHERJES
and 1962-63, which are probably not very accurate. Turning to the
whole range of figures in column 3 at current and in column 7 at
constant prices, we observe that the general tendency is a gradual
decline of the shares from 17 to 18 per cent in the earlier part of the
period to a low level around 13 to 14 per cent during most of the
middle part followed by a gradual improvement in the shares after
1964-65. The decline is sharper for figures at constant prices for
which we get along through at 13 to 15 per cent. In a more rough
way, this is also borne cut by shares on national income at current
and constant prices given respectively in columns 2 and 6, the figures
ranging from 7 to 10 per cent at current and 5 to 10 per cent at cons
tant prices. Shares on rural income at current prices available at
only three points of time also bear this out, the percentages being
13.1 in 1950-51, 10.2 in 1960-61, and 12.5 in 1968-69. Shares on agri
cultural income outside self-employment can be calculated only
up to 1964-65 using earlier estimates of income from assets and our
estimates of labour income. The figures here also depict a similar
picture.
The next point we propose to study is the average real earnings
of agricultural labourer and these figures ak*e obtained from those in
Table 6 by deflating by the consumer price index numbers given in
Table 8. The average earnings at both current and constant prices
have been compared with per capita national income at current and
constant prices and per capita rural income at current prices. The
relevant estimates are given in Table 11.
The following observations are pertinent from a perusal of the
figures given in the table. First, for the period as a whole, while per
capita national income grew by 125 per cent at current, prices and
about 30 per cent at constant prices, the average earnings of agricul
tural labourers increased by 106 per cent at current and a little less
than 2 per cent at constant prices. So, even though there was no
absolute impoverishment of agricultural labourers, their relative
improvement was far less than that of the general population. On
the other hand, as the estimates of per capita rural incomes show,
the improvement was on lines with the general improvement in the
rural areas. Our figures, in a general way, corroborate the findings
of the two ALE's and RLE, when we start considering parts of the
period. For example, we find a drop in the average real earnings
between 1950-51 and 1956-57 and an improvement during the period
1956-57 to 1963-64. The average earnings started dropping from the
beginning and the position during 1956-57 to 1960-61 was pretty
dismal. Then improvement started but this was offset by rapid rise
in prices. The real improvement could be noticed only towards the
end of the period.
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 581
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M? MM ?
100.00 94.8
98.788.9 84.177.090.994.6 106.8 121.6
142.1 177.7 205.6
102.4105.8106.7 112.1 150.0 215.3
102.30
100.00 105.99
114.73 115.95
121.71 128.41
126.38
134.01 131.67135.44 126.99
135.19 147.68 126.54 148.21
148.25
115.89 115.70
100.21
100.00 101.25 106.17
108.88 112.02 114.52
122.26 132.92 131.97
101.99
100.00 106.69
119.56 122.18
122.38 130.02 139.64
136.30
121.23 151.46146.02
148.74 149.69
166.74 137.66
168.41
138.18 166.00
Average earnings Share of agr. lab. Acreage Produc- Per acre Real net Food 100.00 105.40 115.12 120.82120.92 124.12125.42 122.12
1970 (mimeo.) and in column 10 from "Basic Statistics Relating to the Indian Economy", Statistics and Surveys Dept.,
81.91
82.75 79.89
100.90
85.22
83.26 86.29
100.00
91.97
96.29 83.2678.8284.8976.52 76.40 77.8176.52 77.3078.83 Note: Figures in columns 6-9 from "Basic Statistics Relating to the Indian Economy", Commerce Research Bureau, Sept.
Year of agr. workers (Rs.) in agr. income tion produc- output in prices
Table 12. Indicators in respect of agricultural labour and for the agriculture sector
102.90 90.42106.67100.8786.77 78.93 87.00
99.40 90.09
91.29 88.59 88.29 93.39
94.29
101.80 78.07
94.53 87.46
90.03 91.00
94.53 96.46
107.07
100.00 100.64 104.50 113.50
127.97
139.87
94.53 95.82
185.21
1951- 1952-
52 53 1955- 56
1956- 1957-
57 1958- 59
1953- 54 58 1960- 61 1963- 64 1966- 1967-
67 68
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 583
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584 M. MUKHERJEE
X. CONCLUDING REMARKS
Apart from analysing the available material on income of agricul
tural labourers and their share in relevant national income aggre
gates, we have also obtained a new series of real earnings of agri
cultural labourers in this paper. A study of the information suggests
a chronic deterioration of the position of agricultural labourers,
relieved by short periods of improvement in exceptional situations,
when agricultural production rises sharply and agricultural prices
have a tendency to fall. To the extent the position of agricultural
labourers is represented by the share of their income in relevant
national income aggregate, our estimates, to some extent, are affected
by an arbitrary choice of the number of workers that we were
obliged to make. It is necessary to point out, on the other hand, that
our average earnings estimates are independent of the estimates of
the number of workers, and the conclusions based on the average
earnings are not affected by this choice. The choice we have made,
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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 585
REFERENCES
1. S. . Chakravarti, Urna Datta and V. Srinivasan, Share of Urban and
Rural Sectors in Domestic Product in India in 1952-53, Papers on National
Income and Allied Topics, Vol. 1, 1960, pp. 151-153.
2. . N. Raj, "Resources for the Third Plan: An Approach", Economic
Weekly, Annual Number, Vol. XI, Nos. 4-6, January 1969, pp. 203-208.
3. V. K. R. V. Rao, "Economic Growth and Rural-Urban Income Distribu
tion, 1950-51 to 1960-61", Economic Weekly, Vol. XVII, No. 8, February
1965, pp. 373-378.
4. Uma Roy Chowdhury (Datta) and M. Mukherjee, "Income Distribution in
Relation to Economic Growth", IARNIW Seminar on Growth Project,
1971 (mimeo.).
5. M. Mukherjee, National Income of India: Trends and Structure, Calcutta,
Statistical Publishing Society, 1969.
6. Ibid.
7. Uma Roy Chowdhury, "Trends in Factor Shares in India : 1950-51 to
1964-65", Sixth Conference of the Indian Association for Research in
National Income & Wealth (IARNIW), May 1968 (mimeo.); and Uma Roy
Chowdhury, "Trends in Factor Shares in India since the First Five Year
Plan", 11th General Conference of the International Association for Re
search in Income & Wealth (IARIW), Aug.-Sept., 1969, (mimeo.).
8. B. R. Kalra, "A Note on Working Force Estimates, 1901-1961", Census of
India, Paper No. 1 of 1962, 1961 census, Final Population Tables, p. 395.
9. Census of India, 1971, Paper No. 1 of 1971 Supplement, Provisional Popu
lation Tables, 1971.
10. Agricultural Labour in India : Vol. I : All India : Report on the Second
Enquiry, Labour Bureau, Ministry of Labour and Employment, Govern
ment of India.
11. G. D. Rao, "Agricultural Labour, A Diminishing Force", NSS Technical
Paper No. 50/71/51, Indian Statistical Institute, August, 1971 (mimeo.); and
Tables with Notes on Income of Rural Labour Households, National Sam
ple Survey Report No. 134, 18th round, February 1963-January 1964,
Cabinet Secretariat, Government of India, 1969.
12. V K. R. V. Rao (ed.), Agricultural Labour in India, Institute of Economic
Growth, Studies in Economic Growth, No. 3, Asia Publishing House, 1962.
13. Economic Survey of Indian Agriculture, 1959-60, Directorate of Economics
and Statistics, Ministry of Food and Agriculture, July, 1961, pp. 110.
14. N. Krishnaji, "Wages of Agricultural Labour", Economic and Political
Weekly, Vol. VI, No. 39, September 1971, pp. A148-A151.
15. R. K. Lahiri, "Impact of HYVP on Rural Labour Market", Economic and
Political Weekly, Vol. V, No. 39, September 26, 1970, pp. A111-A114.
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