Despite accelerating growth of the economy, the sectorial transformation of rural workforce has been slow. Furthermore, there is a lot of variation in productivity in farm and non-farm sectors. On the other hand, urban absorption of labour force into manufacturing is limited and is very slow in formal jobs, and rather, job generation, especially in the private sector, has mostly been contractual. The ever increasing rural population and labour are finding non-farm sectors as the primary source of employment since agricultural growth is slow and is constrained to absorb the increased labour. An attempt was made in the present paper to estimate the transformation in rural labour in terms of its composition and wages earned by it by analyzing field data collected from 10 villages from five districts located in the state of Andhra Pradesh.

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