Structural retrogression and rise of 'new landlords' in Indian agriculture: An empirical exercise

Abstract

The Indian rural economic structure is witnessing changes, largely due to economic policies and consequent adjustments in the decision-making process of individual economic agents. The structural change observed is a reduction in the share of households dependent on the farm sector due to a decline in the share of cultivators in the workforce. Correspondingly, the set of non-cultivating "peasant" households is increasing in importance and its stakes in land are also on the rise. The NCPHS have a low incentive to invest in agriculture. This has implications for agricultural growth and brings into focus the constraints to agrarian transformation. National Sample Survey data on household assets and liabilities in India is used to illustrate this structural change in the rural sector with increasing importance of the NCPH. At a second level, data from a primary survey conducted in nine villages in Andhra Pradesh is used to identify the micro-processes strengthening the NCPH in rural areas.