Poverty, inflation and wages in Rural India

Abstract

Almost one third of the country’s population continues to live below the poverty line, and a large proportion of poor people live in rural areas. Poverty remains a chronic condition for almost 30 per cent of India’s rural population. The incidence of rural poverty has declined somewhat over the past five years with no clear pattern or trend on why poverty falls. The only direct correlation between the reduction in poverty and official action to remove it seems to be the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) which promises 100 days of guaranteed work or wages to at least one person per household in rural areas. The main objective of this paper is to find out whether the rise of daily agricultural wages leads to a fall in rural poverty.