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Half of farm households in debt

Surveys show 40% still get loans from non-institutional sources & at high rates

BS Reporter  |  New Delhi 

A little over half of India's agricultural households were in debt, with 40 per cent of the dues from non-institutional lenders, during agricultural year 2012-13 (July to June), according to a official survey.

This 'Situation assessment survey of agricultural households' showed 51.9 per cent of all agricultural households were indebted, with the average amount of unpaid dues being Rs 47,000.

Conducted by the National Sample Survey Office, this should not be confused with a Census, as these figures would provide only broadly representative data. For instance, the survey was conducted in 4,529 of India's 638,000 villages. It covered 35,000 agricultural households.

Among the major states, Andhra Pradesh had the highest share of indebted agricultural households in the country (92.9 per cent), followed by Telangana (89.1 per cent) and Tamil Nadu (82.5) per cent.

About 60 per cent of the loans dues were taken from the institutional sources. About 42.9 per cent were from banks, 4.8 per cent from cooperatives and 2.1 per cent from the government, among other institutional sources. About 40 per cent of loans were received from non-institutional lenders - 25.8 per cent were from money lenders.

Meanwhile, another survey on 'Debt and investment in India' showed non-institutional agencies played a major role in advancing of credit to households, particularly in rural India. This covered the period of January-December 2013 and sought responses from 4,529 villages in rural areas and 3,507 urban blocks. Non-institutional agencies had given credit to 19 per cent of rural households, while institutional agencies had done so to 17 per cent.

In urban India, institutional agencies had advanced credit to 15 per cent of households, against 10 per cent by non-institutional ones.

The institutional agencies played a significant role in providing credit to households with a moderate rate of interest (six to 15 per cent) for both rural and urban areas. Among total cash dues funded by institutional agencies, 89 per cent in the rural and 92 per cent in the urban areas were provided at less than 15 per cent interest.

On the other hand, non-institutional agencies provided a significant amount of its total loans to households at an interest rate of 20 per cent or above. The share of such loans to the total by non-institutional agencies was 69 per cent in rural areas and 58 per cent in urban ones.

  • 2.6 per cent of agricultural households own less than 0.01 hectares (ha) of land
  • Among the agri households having less than 0.01 ha land, about 56 per cent gets wage/salary employment as the principal source of income and another 23 per cent depends on livestock as their principal source of income
  • A third of agri households own up to 0.4 ha
  • A majority of agricultural households which possess more than 0.4 ha has cultivation as the principal source of income
  • About 63.5 per cent of agri households has cultivation as the principal source of income. About 22 per cent has wage/salaried employment as the principal source
  • About 44 per cent of agri households has a job card of the Mahatma Gandhi National Rural Employment Guarantee Scheme
  • About 12 per cent of agri households do not possess a ration card
  • A Below Poverty Line card is possessed by about 36 per cent of agri households and another five per cent has Antyodaya cards
  • About 13 per cent of agri households having less than 0.01 ha do not have a ration card

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First Published: Mon, December 22 2014. 00:37 IST