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Experiment code
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18.9.3.61 |
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Experiment Title
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Assessment of income inequality among agricultural households in Gujarat. |
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Research Type
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Departmental Research |
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Experiment Background
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Gujarat is among the few states that achieved high growth rate in agriculture sector. In year
2019-20, gross state value added of agriculture and allied sector at constant (2011-12)
Prices was 10.89 percent which is much above the national average of 4.30 percent. Share
of gross state value added (GSVA) of agriculture and allied sector in total GSVA of state at
current prices found to be 15.63 percent which is below national average of 18.40 percent in
2019-20. Despite of persistent significant growth in agriculture sector, around 20 percent
population still living below poverty. The strategy for inclusive growth requires policy
instruments which can ensure fair distribution of income.The average monthly income per
agricultural household stood at Rs.7926 in 2012–13, which is higher than the all-India
average Rs. 6426. But the growth rate of income (3.4%) is marginally lower than that
achieved at the all-India level (3.5%). It creates some confusion as Gujarat‘s agricultural
GDP growth during this period was more than the all-India average (almost 5.7% per
annum).
It is immensely important that agricultural households should diversify the income sources as
it is getting dire attention at national and international level. In Gujarat the percent rural
population engaged in as agricultural labour is more than that of cultivators. A major share of
agricultural household income came from wages (40.3%) followed by income from the
cultivation (31.4%) and livestock (22.2%) sector and net receipts from non-farm activities
(6.0%) in 2015. It can be seen that most of the studies on income inequality has been carries
out at country level in Indian context (Birthal et al. 2014, Chakravorty et al. 2016,
Ranganathan, 2018, Das and Srivastava, 2021). However, clear understanding of role of
regional disparities in income inequality and distributional impact of income sources is the
prerequisites to form consolidated pro-poor policies. In this very concern, the attempt will be
made to ascertain the income inequality among agricultural households prevailing at
different regional and district level |
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Experiment Group
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Social Science |
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Unit Type
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(02)EDUCATION UNIT |
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Unit
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(15)ASPEE AGRIBUSINESS MANAGEMENT INSTITUTE (NAVSARI) |
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Department
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(281)ASPEE Agribusiness Managment Institute, NAU, Navsari |
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BudgetHead
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(341/12245/00)341/03/REG/01878 |
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Objective
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1. To study the regional disparities in income of agricultural households from various
sources
2. To find out overall income inequality of agricultural households |
| 3. To assess the share of individual income source to total income inequality |
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PI Name
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(NAU-EMP-2013-000974)VISHAL SHANKAR THORAT |
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PI Email
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vishalthorat@nau.in |
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PI Mobile
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8469552697 |
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Year of Approval
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2022 |
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Commencement Year
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2022 |
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Completion Year
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2024 |
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Research Methodology
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Data:
Secondary data pertaining to income from various sources viz. cultivation, livestock, wages
& salary and non-farm business sourced from 77th round Land and Livestock Holdings of
Households and Situation Assessment of Agricultural Households (January – December
2019) and 70th round situation assessment survey of agricultural house holds of the National
Sample Survey Office, Ministry of Statistics and Programme Implementation (MOSPI),
Government of India (GoI). The survey has been conducted in two visits V1 (January -
August 2019) and V2 (September- December 2019) and canvassed 2128 and 2077
agricultural households in Gujarat in two visits respectively. An agricultural household was
defined as that which received an income of more than INR 4000 from agricultural activities
and had at least one member self-employed in agriculture, either in the principal status or in
subsidiary status during the last 365 days.
Analytical tools:
1. In order to fulfil first objective, the four major sources of income in the state viz. cultivation,
livestock, wages & salary and non-farm business are identified. Cross tabulation will be
made in order to study the regional and district wise disparities in the income. In order to
carry regional analysis, five NSS regions of Gujarat viz. South Eastern, Plains Northern, Dry
areas, Kachchh and Saurastra will be taken into consideration.
2. Gini coefficient and Palma ratio will be calculated to find out overall income inequality among
agricultural households‘ region and district wise. The Gini coefficient is a single number that
demonstrates a degree of inequality in a distribution of income. he Gini coefficient is the
cumulative shortfall from equal share of the total income up to each percentile. That summed
shortfall is then divided by the value it would have in the case of complete equality. The
Palma ratio is the ratio of the top 10% of the population‘s share of income divided by the
poorest 40%‘s share.
3. Third objective of the study of assessment of the share of individual income source to total
income inequality will be achieved by using the source decomposition of the Gini
coefficient.Decomposition of the Gini coefficient shows the share of inequality of individual
source to total inequality and the marginal effect of individual income source of income to
total inequality level. Following Lerman and Yitzhaki (1985) the Gini coefficient for
total income inequality, G, will be computed as follows:
???? = ????????????????????????
????
????=1
(1)
where Skrepresents the share of source k in total income and reflects how important the
income source is with respect to total income; Gkis the source Gini corresponding to the
distribution of income from source k indicating equality/inequality of income distribution from
a given income source and Rkis the Gini correlation of income from source k with the
distribution of total income indicating how a given income source is correlated to the total
income of a household. In eq. 1
???????? = ???????? ???? (2)
???????? = 2???????????? ????????, ???????? ???????? (3)
???????? = ???????????? ????????, ???? ???????????? ????????, ???????? (4)
Where mkis the mean income from income source k, Cov(Yk, Fk) is the covariance between
income component k and its cumulative distribution and Cov(Yk, F) is the covariance
between income component k and cumulative distribution of total income. The share of
income inequality of the income component (Si) can be described as,
???????? =
????????????????????????
???? (5) |
85
From Equation 1 the partial differentiation of the overall Gini coefficient with respect to
percentage change (????)in the source of income k can be computed by the following equation.
????????
???????????? = ???????? ???????????????? - ???? (6)
Then, the marginal effect of the income source relative to the overall Gini can be obtained by
dividing eq. (6) by overall Gini coefficient (G) as follows
???????? ????????????
???? =
????????????????????????
???? - ???????? = ???????? - ???????? (7)
Theil index is also important tool which has wide applicability in measurement of inequality.
The key advantage of Theil index is that, unlike the Gini coefficient, the total amount of
inequality measured by it can be decomposed into two additive components of between
group and within-group inequality as
???? =
???????? ????
????
????=1
???????? ????
????????
???????? ????
+
???????? ????
???????? ????
????????
????
???? =1
(8)
where m equals the number of groups (regions in our case), N and Nm the total number of
households and the number of households in group m respectively, Ym the monthly income
of a household in group m and Y is the mean income of all households. The first and second
terms in the eq. (8) represents between-group and within-group inequality respectively |
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