Livelihood Diversification in Rural India

This study aims to ascertain the level of livelihood diversification and examines the socio-economic contexts of livelihood diversification in rural India. Employing data from India Human Development Survey (IHDS-II), 2011-12, an Inverse Herfindhal-Harschman Diversity Index (IHHDI) was calculated incorporating eleven income sources (livelihood strategies). In addition, the contribution of each strategy in households’ total income has been calculated. Furthermore, binary logistic regression was applied to predict the households’ engagement in each livelihood strategy and the likelihood of high IHHDI. Results indicate that the higher livelihood diversifications were found among the households with large size, high dependency, lower social groups, low educated, landless, marginal and small farming, and economically poor. This study also highlights the significance of diversification strategies in raising households’ income. It is suggested that broadened policy support is required to promote diversification for economic development in rural India.