That rural employment, particularly in the informal sector, will fetch lower incomes, does not always hold true.
In fact, hired workers in the informal sector in rural Gujarat earned twice as much as their counterparts in urban areas, a recent report of the National Sample Survey Organisation show. Hired workers in rural Gujarat’s informal sectors earned about ₹1,93,925 per year in 2015-16 compared to ₹90,146 by their counterparts in urban areas.
Gujarat was not the only State where rural wages in the informal sector were on an average higher than the wages in urban areas, but it was a clear outlier if the data published by the NSSO in its report ‘Key Indicators of Unincorporated Non-agricultural Enterprises (Excluding Construction) in India’ is accurate.
Rural wages in the informal sector were marginally higher than the wages in urban areas in Himachal Pradesh, Jharkhand, Uttarakhand, Nagaland, Arunachal Pradesh and union territories such as Chandigarh, Dadra and Nagar Haveli and Daman and Diu.
The difference in most of these places were small – ranging between two per cent and 12 per cent. The difference was higher in Arunachal Pradesh, where rural wages were about 24 per cent higher than urban wages.
On an average, at the all-India level, rural wages in the informal sector were about 19 per cent lower than the urban wages.
The difference between rural and urban wages was the highest in North-Eastern as well as Northern States.
In Mizoram, wages in rural informal sector were about 46 per cent lower than in urban informal units. In the country’s most populous State of Uttar Pradesh, average wages in the rural units were 40 per cent lower than in urban areas.
In Haryana, the difference was 35 per cent, Chhattisgarh 31 per cent, Madhya Pradesh 30 per cent and Rajasthan 26 per cent.
The difference in the rural and urban wages for the informal sector was the least in Kerala and Telangana where the rural wages were just about three and two per cent lower, respectively.
The report also shows that on an average an informal sector worker in Kerala, where labour is highly unionised, earns about 134 per cent more than in Assam.
Wages in the informal sector were highest in Kerala at ₹1,25,616 per annum, followed closely by Haryana at ₹1,24,726 per annum, when the average State-wide wages are considered.
They were lowest in Assam at ₹53,726 per annum and wages in Uttar Pradesh were only marginally higher at ₹58,669.
The difference is wider when the wages in rural areas are considered. Average wage in informal sector in rural Gujarat, as mentioned earlier, was ₹1,93,925 per annum and in rural Kerala at ₹1,23,048.
When compared with wages in rural Assam, wages in Gujarat were 368 per cent higher and wages in Kerala, 197 per cent higher.