Share of Agricultural Labour in National Income

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 paper the author tries to build up a series of the dis

tributive share of agricultural labour in national income
originating in the agricultural sector for the post-indepen
dence period. The study reveals 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.
INTRODUCTION

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.

Dr. M. Mukherjee is Professor at Indian Statistical Institute, Calcutta.

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564 M. MUKHERJEE

II. POSING OF THE PROBLEM

"Labour share in national income" is not an unambiguous phrase,
and it is necessary to clarify the notion first, indicating what con
cepts we propose to use in the study. Income originating in agricul
ture can be split up exhaustively into the three customary factor
shares: (i) employee compensation, (it) income of the self-employed,
and (ni) income from assets. The second category contains a labour
and a capital share but it is not possible here to separate the two
flows. If one had an idea of the share of the equity of the self
employed in agricultural capital inclusive of land, and if one is
permitted to assume that the rate of return to capital for the self
employed is the same as that for the sector as a whole, then one
could obtain a share of income from assets for the self-employed, the
residual giving their pure labour share. We have not attempted this
because even the wealth of information given in Farm Management
Surveys does not provide for this breakdown and in consequence,
our labour share is exclusive of the labour share concealed in the
income of the self-employed.
In Indian national income statistics, one could use a combined
sector agriculture which includes forestry and fishery, or a more
disaggregated agriculture sector exclusive of these. By patient study,
it is also possible to take out from the disaggregated sector, the
activities pertaining to plantation industry and exploitation of ani
mal husbandry. While there is no reason why animal husbandry
should be taken out of agriculture, exclusion of plantations would
have been a positive gain for our purpose. But because of the rela
tive smallness of the sectors like plantations, forestry and fishery,
we have followed the easiest course of working with the aggregative
agriculture sector inclusive of animal husbandry, plantations, fores
try, and fishery.
However we define the labour income in agriculture, its share
can be worked out on different aggregates, and the following four
aggregates are relevant for this purpose: (i) national income, (?)
agricultural income, (Hi) rural income or national income originating
in rural areas, and (iv) agricultural income originating in rural areas.
While it is customary to talk in terms of national income,
in practice one has to follow an allied concept, net domes
tic product (NDP), which is not far from national income
in the Indian case. When we talk in terms of income of
a sector or income of a region, we usually mean NDP or
the aggregate net output originating in the enterprises in the sector
or situated in the region. It is neither feasible nor necessary to obtain
the corresponding national income estimates by adjusting for the
net factor income flows between the sector or the region and the

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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

latter concept is more relevant, because the consumption is planned

on a household basis. In fact, aggregate consumption expenditure
per household is helpful as an indicator of this. All these averages
have been used in the studies on agriculture workers in India, but
we shall primarily work with income per labourer, using the other
two concepts only incidentally.

III. PLAN OF THE STUDY

The discussion in section II indicates the types of estimates neces
sary for our study. In the subsequent sections, we shall tell the story
of the available estimates and our manipulations, one after another.
Finally, we shall present our estimates and discuss the basic findings
in a section. This will precede the final section giving some conclud
ing remarks. The rest of the paper is thus organized under the fol
lowing sections: Sec. IV: National income estimates; V: Urban and
rural income; VI: Distribution of national income by factor shares;
VII: Number of agricultural labourers; VIII: Average earnings of
agricultural labourers at current prices and in real terms; consumer
price index number for agricultural labourers; IX: A synthetic pic
ture of aggregate and average earnings of agricultural workers;
shares of agricultural labourers in relevant aggregates; basic findings
about changes in shares and average earnings, both nominal and
real; comparison with other results and against overall growth of
agriculture in India; and X: Concluding observations.
IV. NATIONAL INCOME
The simplest task in the study was to obtain a comparable series of
national income for the time horizon, 1950-51 to 1968-69, considered
by us. We did not, however, adopt the easiest course of using the
conventional national income series available for the entire time
period because today, not unreasonably, we consider the revised
series as better than the conventional series. The revised series in
real terms (at 1960-61 prices) is available for the period 1954-55 to
1968-69, and at current prices for the period 1960-61 to 1968
69. We have accepted these estimates without any change. The
revised estimates for NDP in real terms separately for agriculture
and non-agricultural sectors have been pushed back to 1950-51 by
using the corresponding conventional estimates in real terms. Adding
these, we get estimates of revised NDP in real terms. Likewise, we
have pushed back the estimates of national income in the same
manner by using the aggregate conventional estimates. This esti
mate of income is adjusted slightly for the difference in the NDP
estimates arising out of direct pushing back of the NDP and obtain
ing it as a sum of agriculture and non-agricultural sectors.

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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.

Table 1. Estimates of national income, 1950-51 to 1968-69 (in Rs. crores)

At current prices At 1960-61 prices

Year national NDP agr. non. national NDP agr. non.
agr. income agr.
1950- 51 8"8i 8819 4911 3908 9082 9126 5090 4036
1951- 52 9157 9208 5041 4167 9330 9376 5207 4169
1952- 53 9004 9040 4831 4209 9697 9733 5395 4338
1953- 54 9^38 9667 5332 4335 10311 10339 5840 4499
1954- 55 8751 8778 4368 4410 10548 10576 5899 4677
1955- 56 9258 9270 4550 4720 10907 10917 5902 5015
1956- 57 10610 10628 5577 5051 11508 11524 6195 3329
1957- 58 10651 10S78 5315 5363 11348 11373 5889 5484
1958- 59 11884 11920 6281 5639 12248 12274 6536 5738
1959- 60 12233 12293 6248 6045 12462 12522 6433 6089
1960- 61 13294 13366 6821 6545 13294 13366 6821 6545
1961- 62 14050 14148 7055 7093 13763 13859 6881 6978
1962- 63 14873 14981 7197 7784 14045 14155 6702 7453
1963- 64 17094 17208 8357 8851 14845 14958 6894 8064
1964- 65 20061 20209 10214 9995 15917 16061 7517 8544
1965- 66 20621 20786 9945 10841 15021 15173 6464 8709
1966- 67 23903 24136 12011 12125 15243 15392 6441 8951
1967- 68 28374 28633 15140 13493 16650 16842 7546 9296
1968- 69 28678 28936 14502 14434 17057 17233 7544 9689

V. RURAL AND URBAN INCOME

Indian official national income statistics do not furnish any break
down of national income by urban and rural areas. This is unfortu
nate because in the preparation of the estimates in several sectors,
urban-rural differentials in average earnings are explicitly taken
account of and with sustained effort it will not be difficult to a table
giving national income by industrial origin broken down by urban
and rural areas. Such a table will be invaluable for analytical pur
poses, furnishing data on differential development of the two areas
and providing a deeper insight into the functioning of the Indian

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 568 M. MUKHERJEE

economy. Several attempts have been made by private research

workers to fill in this gap, and mention may be made of the pioneer
ing study by Chakravarti, Datta and Srinivasan1 followed by . N.
Raj,2 V. K. R. V. Rao,3 and Roy Chowdhury and Mukherjee.4 The
first paper presented estimates for 1952-53 with detailed industrial
breakdowns. Estimates by Raj for the period 1953-54 to 1956-57 and
by Rao for the years 1950-51 and 1960-61 are more aggregative. Uma
Roy Chowdhury (Uma Datta) who was jointly responsible for the
pioneering study and who worked with Rao has recently revised the
estimates for 1950-51 and 1960-61 and presented them with full
sectoral details in the last paper cited, and we have made use of
these estimates in the present paper.
We have accepted the urban and rural percentage shares as
given in the paper for different industrial sectors and applied these
to the income aggregates worked out by us earlier, thus modifying
the aggregates given in the parent study slightly. Sectoral details
for all the non-agricultural sectors are not necessary for our purpose
and have not been provided. The estimates thus relate to the aggre
gate national income and its two major breakdowns, an aggregate
agriculture and a consolidated non-agricultural sector. We should
further note that the estimates here are at current prices only.
Finally, the estimates for 1968-69 presented by us are not based on
any detailed work like those for 1950-51 and 1960-61 and have been
obtained on a rough and ready basis. The estimates are presented
in Table 2.

Table 2. NDP originating in urban and rural areas

Sector In Rs. crores Percentage share

NDP Rural Urban NDP Rural Urban

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

and it is necessary at least to obtain the income of agricultural

labourers at constant prices. A very crude measure of factor shares
at constant prices can be obtained by applying to the aggregates at
1960-61 prices the percentage factor shares available from data at
current prices. This procedure would be correct, for agricultural
factor shares, if there is some reason to assume that the price levels
of all types of agricultural production had moved in the same way,
and such an assumption is probably not entirely unjustified. In view
of this, we have retained these estimates as a check on estimates at
constant prices derived by another method.
Since our ultimate interest is in the real purchasing power
of income of agricultural labourers, a better deflator for agricultural
labourers' income would be a consumer price index number for
them. Fortunately, this is available, at least for a part of the period,
from official sources, and we have used this for deflation purposes.
It should be noted, however, that this index number does not strictly
apply to the other factor shares in agriculture and also to the aggre
gate agricultural income for obvious reasons. Thus, one is obliged
to adopt a hybrid procedure, one for the income of agricultural
labourers and the other for the rest of the factor income flows in
agriculture and the aggregate agricultural income in case it is neces
sary to present all the factor income flows in real terms, on the as
sumptions made here. But we have used this procedure for deflation
of our own series of income of agricultural labourers only, retain
ing the procedure indicated in the last paragraph for presenting a
consistent though approximate set of all factor income flows in the
country in real terms. A final word about all this is necessary. A
value aggregate is logically deflatable when its components can be
broken down into a quantity and a price counterpart and this is per
mitted by an aggregate value of outputs and an aggregate value of
expenditures. Normally, it is far more difficult to decompose a factor
income flow into a quantity and a price counterpart, because here
one has to obtain measures of the volume of a factor service and its
price, and this is difficult to obtain particularly for non-labour fac
tors. Thus our difficulty here arises out of the inherent complicated
ness of the procedure of deflation of factor incomes and cannot be
simply avoided.
The estimates of percentage shares of factor distribution derived
from sources indicated earlier are presented in Table 3. In this table,
wages and salaries is depicted by W, income of the self-employed by
S, and income from assets by A, the aggregate Y giving the contri
bution to NDP. Symbols with no subscripts denote flows for the
national economy as a whole, while those with "a" for agriculture
sector and "r" for the rest of the economy or the non-agricultural

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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

25.42 26.1226.52 27.6128.17 32.37

Sr
35.89 33.22 27.80 22.75 23.75
22.54
35.81 31.57 27.20
24.05

In Yr of 36.53 35.3334.28 30.42 22.55

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

18.27 18.05 19.6918.8419.93 18.9018.90 19.1718.36

In Ya of Sa 63.76
64.01 61.60
60.45 61.77
62.96 63.30 64.03
63.35 65.41

64.4964.50 63.30 63.82 65.67

17.24
17.46 17.67 17.80
17.80
19.06 18.01
18.03

Wa 17.94 19.8619.5617.1118.00 16.2314.69

21.76 22.29
22.05 24.49 24.77 25.63 24.61
23.43 23.86 26.90

22.22 23.44 26.70 25.58 25.63

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

27.65 30.4530.4829.2430.5628.7029.30 30.7929.60

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

Rs. crores at current prices

876909968
Wa 1032117211541060 1163
1062 1145 1241 1207 1104

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

Rs. crores at current prices

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

1957- 581958- 591959- 60 1962- 63

1951- 52

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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.

VII. THE NUMBER OF AGRICULTURAL LABOURERS

It is extremely difficult to obtain a comparable series of the number
of agricultural labourers. A straightforward use of census counts for
1951, 1961, and 1971 gives undesirable results. If we interpolate
geometrically between the comparable census figures of 1951 and
1961, 27511 and 31482 thousands, given by Karla8 and 47305 thousands
given in the 1971 census,9 we get the figures at column 2 of Table 5.

Table 5, Number of agricultural labourers: alternative estimates (in thousands)

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

1950- 51 27220 27220 27220

1951- 52 27595 27595 27595
1952- 53 27956 27956 27956
1953- 54 28281 28281 28281
1954- 55 28672 28672 28672
1955- 56 29057 29067 29067
1956- 57 29468 29468 29468
1957- 58 29875 29875 29875
1958- 59 30287 30287 30287
1960- 61 31146 31146 31146
1961- 62 31845 31763 31025
1962- 63 33164 32392 30904
1963- 64 34537 33033 30783
1964- 65 35966 33687 30663
1965- 66 37456 34354 30543
1966- 67 39006 35034 30424
1967- 68 40621 35728 30305
1968- 69 42302 36435 30187

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

been reported as cultivators in the 1961 census have been reported

as agricultural workers in the 1971 census, as a consequence of
changes in the definition. It is not possible to make any adjustment
for this with the available information. In columns 3 and 4, we
accept the figures based on census for the period, 1951-1961, but use
two different assumptions for the subsequent period. In column 3,
the labour force for agricultural workers is expected to rise at the
rate of increase of rural labour force taken as a whole for the period
1961-1971. This rate is also very close to the rate of growth of rural
population. In the last column the series for agricultural labourers
has been extended by the rate of growth of the labour force in agri
culture during 1961-1971, and here we get a falling rate for the pre
sent decade. Apart from these estimates, it is also possible to get
some idea of the rate of growth of the agricultural labourers from
the three surveys, the First (1950-51) and the Second (1956-57) Agri
cultural Labour Enquiry10 and the Rural Labour Enquiry (1963-64).11
The 2nd ALE and RLE show a decline of agricultural labourers by
2.2 million. Also, if we use the census rural population estimates in
conjunction with survey estimates of the size of rural households,
the percentage shares of agricultural labour households, in all rural
households and the number of earners per agricultural labour house
hold, one could get another series of estimates of the number of
agricultural labourers for 1950-51, 1956-57, and 1963-64. These esti
mates are dimensionally comparable with the census based estimates
of Table 5 but show a declining trend over the entire period, though
the decline during 1956-57 to 1963-64 comes out to be smaller than
2.2 million in this case.
Confronted with the situation, we have accepted the middle
course and used the estimates given in column 3 of Table 5 for our
subsequent calculation. This implies not only a rejection of direct
census count for 1971 for reasons already stated but also not accept
ing the general evidence of the two ALEs and the RLE. It should be
pointed out that not only the census but also the sample surveys
suffer from changes in definition, and one cannot be sure whether
the declining numbers of agricultural labourers as shown by the
surveys represent a correct finding about the Indian economy. Consi
derable attention was once paid on the comparability of the first and
the second ALE, and, by and large, the finding was that the two sur
vey estimates were not comparable.12 The craze for improved defini
tions in India has led to a situation in which we are unable to mea
sure the changes in many of the important characteristics of our
economy. In case we are interested in changes, as we should be, we
have to forego the pleasure of improving upon concepts and defini
tion from one survey (or census) to another.

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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

Table 6. Average annual earnings of agricultural workers at current prices

in Rs. per year

Year Annual earnings Index

1950- 51 311 104.3
1951- 52 333 108.6
1952- 53 313 104.9
1953- 54 294 98.8
1954- 55 280 93.9
1955- 56 272 91.4
1956- 57 283 95.1
1957- 58 294 98.8
1958- 59 294 98.8
1959- 60 300 100.6
1960- 61 298 100.0
1961- 62 325 109.2
1962- 63 333 111.7
1963- 64 353 118.4
1964- 65 398 133.7
1965- 66 435 146.0
1966- 67 455 152.8
1967- 68 576 193.3
1968- 69 640 214.7

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.

Table 7. Averge earnings of landed and landless agricultural labour house

holds

Categories Rs. or percentage

ALE 1956-57 RLE 1963-64

1. agricultural labour households

(i) with land
agricultural wage employment 255.12 485.00
total 406.77 675.98
(ii) without land
agricultural wage employment 299.59 540.30
total 369.74 655.56
(Hi) average-total 385.38 660.19
2. Percentage of households
(i) With land 10.22 8.12
(ii) without land 14.33 12.78

It has to be pointed out that earnings here relate to households

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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 577

and not to individuals, and some approximation is involved when

these are used to split up the share of agricultural labourer in agri
cultural income into those going to the landed and landless labour
ers. But since the number of earners per household do not differ
very much between the two classes of labourers, the degree of ap
proximation involved need not be very large.
Finally, the earnings of agricultural labourers have to be de
flated and for this we must find an appropriate consumer price in
dex number. This is provided by the index number of consumer
prices of agricultural labourers published by the Ministry of Labour,
Employment and Rehabilitation. The index number is available for
many States up to the current period from 1957 onwards with both
1950-51 and 1960-61 as bases. Hence it is easy to obtain a series
covering our entire time horizon except for the period 1951-52 to
1956-57. Since the overall change in the consumer price level for
the agricultural labour for the period is known, we have obtained
the annual changes in relation to the annual changes in the consu
mer price level for the industrial workers. The consumer price in
dex number for the agricultural labourers thus obtained is given
in Table 8.

Table 8. Consumer price index numbers for agricultural labourers

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

IX. INCOME OF AGRICULTURAL LABOUR AND NATIONAL INCOME:

THE MAIN FINDINGS
While we have considered different aspects of the available infor

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578 M. MUKHERJEE

mation earlier, we have not attempted to present our findings about

the relative position of the agricultural labourers so far. The pre
sent section is intended for this task. We propose to consider here
the share of income of agricultural labour in national income and
other relevant aggregates first. We propose to study their average
earnings against some relevant information. Finally, we consider
the real and nominal changes in the average earnings and shares of
agricultural labour in relevant aggregates against some indicators
of growth of real production and prices in the agriculture sector.
For the first task, we use revised series of nominal and real in
come of agricultural labourers instead of using those presented in
Table 4. The revised series in column 2 of Table 9 is obtained by
simply multiplying the number of workers given in column 3 of Table
5 by average earnings given in Table 6. From these, we get the
figures in column 3 by adjusting for the price changes with the help
of consumer price index numbers given in Table 8. During the period
1950-51 to 1968-69, national income at current prices increased by
3.26 times and at constant prices by 1.88 times. The incomes of agri
cultural labourer grew far less during the period, 2.76 times at cur
rent prices and 1.36 times at constant prices.
Table 9. Revised income of agricultural labour at current and at 1960-61 prices
(in Rs. crores)

Year At current At 1960-61

prices prices
1 2 3

1950- 51 846 906

1951- 52 894 935
1952- 53 875 925
1953- 54 831 860
1954- 55 803 860
1955- 56 791 875
1956- 57 834 869
1957- 58 878 890
1958- 59 890 890
1959- 60 921 915
1960- 61 928 928
1961- 62 1032 1020
1962- 63 1079 1017
1963- 64 1166 1027
1964- 65 1341 1024
1965- 66 1494 993
1966- 67 1594 914
1967- 68 2058 1058
1968- 6* 2332 1235

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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 579

We are now in a position to put together all the evidence dis

cussed earlier and observe the changes in the earnings of agricul
tural labourers alongside the changes in national income and other
indicators of changes in the national economy, particularly in the
agriculture sector. The first point of our study is the relative share
of the income of agricultural labourers in national income, agricul
tural income, and rural income both at current and at constant
prices. The'relevant figures are presented in Table 10. The first
point to note is that our shares in column 3 are not widely different
from the earlier figures in Table 3 up to 1957-58, and show similar
annual changes. Estimates used in the earlier table for 1950-59 and
1959-60 are known to be indifferent and here our shares are far
lower. Our shares, while remaining low throughout, again conform
with earlier figures for 1963-64 and 1964-65. On the other hand, they
are substantially lower than the earlier figures for 1960-61, 1961-62,

Table 10. Share of income of agricultural workers in relevant aggregates

Current prices 1960-61 prices

share of income of agr. labour in Share of income of agr. labo
Year national agricul agri. rural national agricul- agr.
income s tural income income income tural income
income outside .income outside
self-em self
ploy employ
ment ment
6 7 8

1950- 51 9.63 17.23 48.5 13.11 9.98 17.80 49.3

1951- 52 9.76 17.73 49.6 10.02 17.96 51.0
1952- 53 9.72 18.11 50.1 9.54 17.14 49.7
1953- 54 8.62 15.58 45.6 8.34 14.73 44.2
1954- 55 9.18 18.38 48.2 8.15 14.58 43.0
1955- 56 8.54 17.38 48.0 8.02 14.82 45.2
1956- 57 7.86 14.95 42.8 7.55 14.03 41.9
1957- 58 8.24 16.52 45.0 7.84 15.11 42.8
1958- 59 7.49 14.17 41.6 7.27 13.62 42.5
1959- 60 7.53 14.74 43.8 7.34 14.22 43.3
1960- 61 6.98 13.60 43.6 10.25 6.98 13.60 45.9
1961- 62 7.35 14.63 44.9 7.41 14.82 45.2
1962- 63 7.25 15.00 45.2 7.24 15.17 45.7
1963- 64 6-82 13.95 40.5 6.92 13.85 44.7
1964- 65 6.68 13.12 40.1 6.43 13.62 40.2
1965- 66 7.24 15.02 6.61 15.36
1966- 67 6.67 13.27 6.60 13.76
1967- 68 7.25 13.59 6.36 13.96
1968- 69 8.13 16.08 12.53 7.24 16.37

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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

Table 11. Average earnings of agricultural labourer and other comparable

series on average income and output

Income of agr. labour in Per capita national Current real

Rs. per year income (Rs.) income in
Year - - Rs. per. cap.
current 1960-61 current 1960-61
prices prices prices prices
1950- 51 311 333 245.6 254.0 224
1951- 52 324 339 251.8 256.6
1952- 53 313 331 213.4 262.1
1953- 54 294 304 255.7 273.6
1954- 55 280 300 227.9 274.8
1955- 56 272 301 236.6 278.7
1956- 57 233 235 265.8 288.3
1957- 8 294 298 261.4 278.3
1958- 59 294 294 285.7 294.5
1959- 60 300 298 264.2 293.4
1960- 61 298 298 306.3 306.3 261
1961- 62 325 321 316.4 310.0
1962- 63 333 314 327.6 309.4
1963- 64 353 311 368.4 319.9
1964- 65 398 304 423.1 335.8
1965- 66 435 283 426.1 310.4
1966- 67 455 261 482.9 307.9
1967- 68 576 296 560.8 329.2
1968- 69 640 339 554.7 329.9 459

We finally come to an examination of the changes in the shar

and average earnings of agricultural labourers along with th
changes in certain indicators of agricultural activity in the country.
We present in Table 12 index numbers of the average earnings o
agricultural labourers at current and constant prices as well as th
shares of their income at current and constant prices in the relevant
national income totals side by side with index numbers of acreage
physical production, productivity per acre, and real net output in
agriculture, and wholesale prices for food articles. The comparison is
intended to bring out seme interrelations between the variables
observed, if any.
Unfortunately, the figures in the table do not indicate any clear
relation between the variables. In so far as the indicators of outpu
are concerned, that is, figures in columns 7 and 9, we observe a steady
rise up to 1964-65 with fluctuations, a sharp decline in the next two
years and a sharp rise from 1966-67. Prices on the other hand de
lined up to 1955-56 and then increased steadily up to 1967-68 follow
ed by a decline in the next year. The real average earnings of agr
cultural labourers in column 3 and the real share of their income
in agricultural income in column 5, by and large, depict similar

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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

107.42 105.54116.82112.85122.99 117.35120.58 112.75131.66

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

1 234 5 6789 10~

101.80 112.42 116.12 119.52

111.31 114.81 124.42
123.92 120.62 129.23
127.93

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

Current 1960-61 current 1960-61 tivity agr.

82.24 80.96
95.88 85.55 84.91
105.11
76.15
87.17
77.12
100.00
78.87
93.33

Table 12. Indicators in respect of agricultural labour and for the agriculture sector
102.90 90.42106.67100.8786.77 78.93 87.00

prices prices prices prices

99.40 90.09
91.29 88.59 88.29 93.39
94.29
101.80 78.07

90.40 89.49 89.4989.4996.40

101.80

100.00 91.2986.79 88.89

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

107.07 146.30 205.79

Plan. Comm., 1968 and 196

1951- 1952-
52 53 1955- 56
1956- 1957-
57 1958- 59
1953- 54 58 1960- 61 1963- 64 1966- 1967-
67 68

1954- 55 1959- 60 1962- 63 1964- 651965- 66

1950- 51 1961- 62 1968.69

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SHARE OF AGRICULTURAL LABOUR IN NATIONAL INCOME 583

pictures. Both show a relatively sharp decline during the period

1950-51 to 1953-54, a steady decline up to 1966-67 interrupted by a
brief period of improvement following 1960-61, and a relatively
sharp improvement after 1967-68, such that the average real earn
ings in 1968-69 was of the order of that in the beginning of the
period. The only conclusion that can be drawn from this, assuming
that the estimates we have presented are not very wide of the mark,
is that the average earnings of agricultural labourers and their share
in agricultural income, both reckoned in real terms, are likely to
decline, when there is a sustained and steady rise in the agricultural
production of the country, which is normally accompanied with fairly
large rise in the agricultural prices as well. A very sharp rise in the
agricultural production in the country, which is likely to be accom
panied by some fall in agricultural prices, on the other hand, is likely
to improve the average real earnings of agricultural labourers, as well
as their real share in agricultural income. A fall in price does not help
them very much unless there is a large rise in the production. Fur
ther, a very sharp rise in prices of agricultural commodities also
is not helpful, because this affects their cost of living adversely, even
though their earnings enhance in such situations. It is probable that
the steady fall in real average earnings since 1961-62 is partly a
result of very sharp rise in food prices. Also, their conditions round
about 1964-65 could probably have improved had there been more
steadiness in the price level. It appears, finally, that their improve
ment in 1968-69 is a temporary phase, and their condition is likely
to deteriorate secularly, because, in Indian conditions, it may be diffi
cult to have substantial improvement in agriculture with moderate
price incentive.
Analysis of figures at current prices given in the table do not
throw up any further light. We have not also been able to obtain any
link between per acre productivity and average real earnings. The
estimates have, nonetheless, been retained in the table.
These observations should be regarded, at this stage, only as
hypotheses. The average incomes we have obtained depend on some
raw data given in Agricultural Prices in India. We do not know how
far they are representative of the population of agricultural workers
in India. Further, the method of averaging we have adopted for
obtaining both the State and Indian averages are crude and can per
haps be improved upon. Finally, we have based our conclusions on
ten States only and not all the States for purposes of comparability.
While we have checked our figures against the survey results of
household income per earner and obtained dimensional corrobora
tion, further work is needed before our observations could be
treated as definitive findings and not plausible hypotheses.

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584 M. MUKHERJEE

The share of landed and landless agricultural labourers in agri

cultural income is of some interest. Incomes of agricultural labour
households are given in the Second ALE (1956-57) and in the RLE
(1963-64) separately for landed and landless classes, and these esti
mates can be used to split up the overall agricultural labourers'
share in agricultural income into those going to landed and landless
classes. The relevant estimates of average earnings are given in
Table 6. From these we find that the average earnings of landed
classes were 1.-0560 times and the landless classes 0.9594 times the
average. The corresponding figures for RLE were 1.0239 and 0.9930,
showing a closing down of the gap. Using these figures in conjunc
tion with the relative proportions of landed and landless agricultural
labour households in all rural households given in the surveys, we
obtain the respective shares of landed and landless classes in agri
cultural labour income as 41.6 and 59.4 per cent in 1956-57 and 38.8
and 61.2 per cent in 1963-64. Or in other words, landed classes ob
tained Rs. 347 crores and landless classes Rs. 487 crores in 1956-57
out of the total share of Rs. 834 crores at current prices. The corres
ponding figures at constant prices were Rs. 362 crores for the landed
and Rs. 507 crores for the landless out of a total of Rs. 869 crores.
In 1963-64, the tended at current prices got Rs. 452 crores and land
less Rs. 714 crores out of Rs. 1,166 crores; and at constant prices,
Rs. 394 crores and Rs. 633 crores respectively out of Rs. 1,027 crores.
Thus, among agricultural workers, the position of the landed has not
improved vis-a-vis that of the landless during the period under con
sideration. It is not possible, however, to push forward the study to
cover the more recent past.

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

however, has luckily proved to be such that conclusions based on

the shares are not widely different from those based on the average
earnings. Finally, it is necessary to emphasize that a work of this
type would have needed much more time, in the absence of the
papers by many predecessors which we have cited and profitably
utilized.

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
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