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Rural wages can’t rise sans productivity changes

With rural wages continuing to rise, at 17.4% in September, the political class has every reason to celebrate since a higher wage growth means a sharper reduction in poverty. Indeed, the fall in poverty levels over the past few decades can be directly related to the dramatic hike in rural wages. While nominal farm wages rose 11.6% per annum in the 1990s, growth fell dramatically to just 1.8% per annum between 2001-02 and 2006-07, before rising once again to 17.5% per annum between 2007-08 and 2011-12.

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