Year: 2026 | Month: June | Volume 71 | Issue 2
Inter-State Dispersion in Agricultural Wages in India: Trends and Explanatory Factors
Vijaya Rajni
DOI:10.46852/0424-2513.2.2026.19
Abstract:
Agricultural wages in India have increased substantially over time, yet inter-state disparities have remained persistent and uneven. Evidence from official wage series shows that spatial wage inequality has neither followed a smooth path of convergence nor declined consistently with economic growth or policy expansion. Measures such as the coefficient of variation indicate that inter-state wage disparities narrowed during certain phases but widened during others, including periods of rapid growth and intensified state intervention. This raises important analytical questions regarding why agricultural wages respond differently to broadly similar economic forces across states and why technological change, non-farm expansion, and national employment programmes have failed to generate sustained convergence. This study argues that agricultural wage determination in India cannot be adequately explained by subsistence-based theories or standard neo-classical demand–supply models. Empirical evidence points to the central roles of productivity growth, labour demand, institutional interventions, and alternative employment opportunities, operating within socially segmented and institutionally mediated labour markets. Persistent caste- and gender-based wage gaps, uneven policy effects, and enduring regional inequalities underscore the limitations of purely market-driven explanations. The analysis highlights the need for an integrated framework that links economic forces with institutional and social structures to explain the long-term dynamics of agricultural wages and inter-state wage inequality in India.
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