Importance of Rural Non-farm Employment in Sustainable and Inclusive Rural Livelihood

Abstract

Diversification in rural employment is key to achieving sustainable and inclusive development. Expanding rural non-farm employment (RNFE) allows the rural workforce to get involved outside the agriculture sector. It helps households to come out of multidimensional poverty. In this article, unit-level data from the Employment and Unemployment Survey and Periodic Labour Force Survey are used to understand structural characteristics and trends of RNFE across socio-economic groups. As far as methodology is concerned, we applied only simple percentage analysis. The key findings unveil that nearly half of the working population actively engages in RNFE. The increasing number of young people participating in RNFE unequivocally shows progress in rural economic activity. Workers aged 30–45 are the most economically productive and mobile group. Furthermore, the growing presence of educated individuals in RNFE underscores its crucial role in the rural economy. Socially, many individuals from lower groups than ‘Others’ in RNFE demonstrate the inclusive nature of this sector. However, it is a big concern that real wages have declined across genders in 2023–2024 compared to 2017–2018, based on the 2016 base year as per the Reserve Bank of India. Wage disparities between males and females are also evident. The need of the hour is stronger labour market interventions, including better enforcement of minimum wages, expansion of employment schemes like Mahatma Gandhi National Rural Employment Guarantee Act and targeted efforts to formalise casual work, particularly in the non-farm sector.