Statsguru: Households with smaller landholdings earn more from wage labour

Agricultural households  earn on an average 35 per cent of their monthly household income from cultivation, according to the All India Rural Financial Inclusion Survey 2016-17. 

The survey carried out by NABARD for agricultural year 2015-16, estimates that the average monthly income of agricultural households in 2015-16 was roughly Rs 8,931. For non-agricultural households in rural areas, it is estimated to be lower at Rs 7,269 as shown in Chart 1. 

Digging deeper one finds that among agricultural households with smaller land holdings, income from casual wage labour accounts for a significant share of the total household income as seen in Chart 2. Households with smaller land holdings also have a lower surplus (income minus consumption) to income ratio as compared to those who own more land (Chart 3). 

On the expenditure side, the survey data shows that the share of expenditure allocated for food is lower for agricultural households with greater land holdings (Chart 4). Data on household ownership of assets reveals a rather peculiar phenomenon. Household ownership of agricultural assets is far lower than their ownership of consumer durables. As seen in Chart 5, only 5.2 per cent of households own a tractor. In comparison, roughly 55 per cent of households own a TV, while another 38 per cent own a scooter/motorcycle as seen in Chart 6.

On indebtedness, the survey data shows that more than half of agricultural households were indebted at the time of the survey (Chart 7), with bulk of the credit flowing from non-institutional sources (Chart 8). On investments, the survey data shows that a larger share of savings of agricultural households flows towards financial assets such as banks, post offices and shares/ bonds market (Chart 9). 

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines Source: NABARD All India Rural Financial Inclusion Survey 2016-17 ; Compiled by BS Research Bureau