This extract highlights the idea that tenancy contracts act as an adjustment mechanism in a context of imperfect markets. The argument assumes that households respond mainly to economic constraints, especially labour availability. However, this explanation may be incomplete, as it underplays the role of social norms, caste relations, and power asymmetries in shaping access to land and contracts. Tenancy choices may therefore reflect social constraints as much as economic rationality. To what extent can tenancy contracts be explained by market imperfections alone, rather than by social and institutional factors?

This extract highlights the idea that tenancy contracts act as an adjustment mechanism in a context of imperfect markets. The argument assumes that households respond mainly to economic constraints, especially labour availability. However, this explanation may be incomplete, as it underplays the role of social norms, caste relations, and power asymmetries in shaping access to land and contracts. Tenancy choices may therefore reflect social constraints as much as economic rationality. To what extent can tenancy contracts be explained by market imperfections alone, rather than by social and institutional factors?

This passage highlights that long-run development operates through cumulative and interdependent processes rather than through a simple sectoral reallocation of labour. The persistence of agricultural employment despite declining output shares suggests that agriculture continues to play a stabilizing and coordinating role in rural labour markets, influencing income diversification, tenancy relations, and investment decisions. Long-term data make visible these slow institutional and technological adjustments that are often missed in short-run analyses. Structural transformation in Palanpur therefore appears less as an exit from agriculture than as a gradual reorganization of its functions within a diversified rural economy. Does this imply that agriculture should be understood as a complement rather than a residual sector in long-run development?