FACTORS DETERMINING INCOME

RURAL OCCUPATIONAL STRUCTURE

Rural AreaIn general, arural areais a geographic area that is located outside cities and towns

The "rural sector" means any place as per the "latest census" which meets the following criteria,A population of less than 5,000Density of population less than 400 per sq km andmore than "25 per cent of the male working population" is engaged in agricultural pursuits.

Nearly70%of the country's population lives in rural areas where, for the first time since Independence, the overall growth rate of population has sharply declined, according to the latest Census.

OccupationAn activity that serves as one's regular source of livelihood

Occupational StructureThe rural labor markets are poorly understood component in many developing countries including India.

Even though the share of non-farm sector in Gross Domestic Product (GDP) increasing at faster rate, the labor shift from agricultural to non-agricultural sector is at much slower rate and the labor force participation rates are still low for women.

Of-late, there is increased dynamism in rural labor markets with increased rural-urban linkages, expansion of non-farm employment, migration and technological change in rural and agricultural sectors, arm mechanization, increase in labor productivity, implementation of employment guarantee act (MGNREGA Act), and increased share of educated labor force. Young, educated, skilled manpower is migrating to urban areas resulted in a widening gap in wage rates between rural and urban sectors, agricultural and non-agricultural sector employment.

As a result, there is persistent poverty in some parts of rural and agricultural sectors which are not benefited from these growing opportunities.

About 60% of poor in India are agricultural laborer.

Features of Occupational StructureAgriculture is main occupationLess Development of IndustriesUnbalancedLess IncomeSmall VillagesBackward AgricultureIncrease in Proportion of Agricultural LaborersLess Development of Tertiary ActivitiesMeasures for Improving Occupational Structure

(i) Agricultural productivity may be raised. (ii) Effective measures may be taken to control population. (iii) Much emphasis should be given on labour intensive industries specially cottage and small scale industries in rural regions.(iv) Rural development schemes must yield benefits to weaker sections. (v) Non-agricultural sector must be extended to absorb maximum new entrants of labour force.

INCOME PATTERNIntroductionDEFINITION of 'Income' Money that an individual or business receives in exchange for providing a good or service or through investing capital. Income is consumed to fuel day-to-day expenditures. Most people age 65 and under receive the majority of their income from a salary or wages earned from a job.TRADITIONAL OCCUPATION IN INDIAN VILLAGES

Agriculture remains the principal occupation in Indian village society from the ancient period. Reason The climatic conditions in most parts of India are suitable for agricultural activities and hence, India has become one of the leading producers of agricultural products in the world. In the changing time agriculture has been replaced by other occupations in different parts of India in the contemporary period.

In the villages of hilly areas, the principal occupations include agriculture and gardening. Agriculture is still the major source of income in the northern and eastern Indian villages.

ScenarioIncome and consumption pattern of the rural households depend on many factors like assets, level of education, occupation and demographic characteristics.The sources of income in the rural household sector are various. In most of the households the main occupation is not the only source of income and in the cultivator households, more: than 50 per cent of the household income originate from other sourcesSources of IncomeCultivators/ AgriculturalLaborSalariedSelf-employedDairyOther occupation in Indian villages includes the priests, carpenters, blacksmiths, barbers, weavers, potters, oil pressers, leatherworkers, sweepers, water bearers, toddy-tappers and many others. Cottage IndustryTourism Industry

Income PatternAverage wages of workers have gone up by 54 percent over the last five years, with incomes indexed to inflation. Inadequate rainfall and failure of monsoons results in higher inflation further resulting in slow GDP growth which is already at its low of 5-5.5%.

Nearly 19% of the rural population belongs to households with monthly per capita consumption expenditure of less than Rs 365 which is spending less than Rs 12 per person per day on consumption.

In urban India, 22% of the population belongs to households with monthly per capita expenditure less than Rs.580 which is about Rs 19 per person per day.

The average consumption spending is Rs 19 a day/ Rs 625 a month in rural areas but is Rs 39 a day/Rs 1,171 a month in urban areas.

Asset PatternThe proportion in which assets are distributed between productive and unproductive items holds the key for the level of income and consumption expenditure of households. The households possess both physical assets and financial assets. In the rural areas a good portion of the assets are held in the form of physical assets and very little in the form of financial assets. The physical assets are land, buildings, livestock, agricultural tools and implements and other household durable goods. Valuation of most of these assets involves a lot of problems

Assets & Saving PatternThe different financial instruments selected for investment are classified as deposits, chits, post office saving, insurance, provident fund and jewellery and others. Jewellery is considered as a financial asset , as this is considered as more liquid ccmpared to other physical assets. Claims on government and investment in shares and debentures are included under thehead jewellery and others since these households have invested very little inthese assets. THANK YOU