An analysis of declining incidence of regular labour contracts in rural India

Evidence obtained from the ICRISAT villages in India suggests that the decline of regular contracts has been accompanied by the growth in real wages and casualisation of the rural labour force. In view of this evidence, the article examines the causes of the declining incidence of regular contracts in rural India. We argue that this has been caused by the leftward shift in the regular labour supply curve due to improved employment and credit opportunities and not an upward movement of the labour demand curve as manifested by the increase in real wages over the years.