Discussion
In India, rural incomes are generally lower than urban incomes. Which of the following account for this?
I. A large number of farmers are illiterate and know little about scientific agriculture
II. Prices of primary products are lower than those of manufactured products
III. Investment in agriculture has been low compared with investment in industry
Answer: A
All three reasons apply.
Illiteracy limits the adoption of improved practice; the terms of trade have long run against primary products and in favour of manufactures; and public and private investment per worker in agriculture has been far below that in industry. Together they hold rural productivity, and therefore rural incomes, down.
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