DYNAMICS OF RURAL INDEBTEDNESS IN INDIA

Abstract

This paper explores the dynamics of indebtedness amongst the farm household living in rural India. The
study is based on the state level data obtained from the 70th round survey of National Sample Survey Organisation
(NSSO) conducted in agricultural year 2012 to 2013. The study aims to analyze the dimensions and patterns of
indebtedness and causal factors behind it. In terms of access to credit, seen through the extent of indebtedness, most of
the indebted farmers belong to the small and marginal categories, poor farmers with lower land holdings are much more
deprived of formal sources of credit than the comparatively richer ones. Nevertheless, it is heartening to note that loans
are taken mostly for income generating purposes; but it also indirectly implies that the poor are not getting access to
formal sources of credit even for the income generating purposes. The research concludes that the major factors that
lead to indebtedness. This situation demands urgent attention of the government, policy makers and planners to save the
farmers from committing suicide and to re-boost the agricultural economy of the country.