Mumbai: Defying the impact of the note- ban which has yanked down consumer sentiment, the rural wages have been on a steady upward spiral, rising by 7.3% in November, suggesting a likely release of pent-up demand after demonetisation, says a report. “Nominal rural agricultural wages rose to 7.3 per cent year-on-year in November, from 6.9% in October, remaining well above the previous 12-month average of 4.8%,” Japanese brokerage Nomura said in a note. “We expected rural wage growth to moderate in November, as we thought demonetisation would hurt the more cash-reliant rural economy,” Nomura India chief economist Sonal Varma said in the note. Rural wages may have defied this demonetisation effect because of the hike in minimum wages announced by the government in September, Varma reasoned and cited that Reserve Bank data, which shows that the revision in basic wages, including variable dearness allowances, worked out to an overall increase of 42% and would impact rural wages as well. It can be noted that rural wage growth has only recently started to trend higher, after almost two years of stabilisation.

Source: Mint January 29, 2017 05:22 UTC