Urban rural Income differentials in India: an inter-regional analysis

Abstract

An analysis of the urban-rural income differentials within regions constitutes an im portant aspect of the study of regional income disparity and provides useful informa tion for an effective multiple planning. The present study aims at measuring the extent of inter-State variations in the urban-rural per capita income differentials and analysing the contribution of the structural factors to the urban-rural differentials and the overall sensitivity of the latter to sectoral productivity differentials. The study is based on the data drawn by the 1971 census and uses the method of sectoral produc tivity differentials for estimating the urban-rural income differentials in fifteen major States in India. The main findings of the study are: (a) There exist considerable inter-State vari ations in the rural-urban per capita income differentials, the ratio ranging from 1.33 in Punjab to 3.97 in Bihar. Rural per capita income shows a greater regional variation than urban per capita income; and (b) the structural factors contribute marginally more to the urban-rural income differentials than the sectoral productivity differen tials, and within the latter, the productivity differentials in the tertiary sector contribute more to the urban-rural income differentials as compared to those in the secondary sectors.