Land Distribution, Income Generation and Inequality in India's Agricultural Sector

Abstract

This paper is a contribution to understanding income generation and inequality in India's agricultural sector. We analyze the National Sample Surveys of agriculture in 2003 and 2013 using descriptive and regression based methods, and estimate income inequality in the agricultural sector at the scale of the nation and its 17 largest states. We show that: (a) there are significant state-level differences in the structures/patterns of income generation from agriculture, (b) there is a negative relationship between the amount of land owned by the household and share of wages in total income, (c) income inequality in India's agricultural sector is very high (Gini Coefficient of around 0.6 during the period), and (d) about half of the income inequality is explained by the household-level variance in income from cultivation, which in turn is primarily dependent on variance in landownership.