Debt Trap

Debt Trap


The key findings of the report titled Key Indicators of Situation Assessment Survey of Agricultural Households in India, NSS 70th Round (published in December 2014) (January, 2013- December, 2013) are as follows (Please click here to access):

• The NSS 59th Round (January-December 2003) had found that 48.6% farmer households were indebted while the NSS 70th Round (January-December 2013) has observed that 52% of India's agricultural households were indebted in July, 2012-June, 2013.

• A similar survey on rural indebtedness by the NSSO in 1991 found indebtedness among only 26% of farmers.

• On an average, the amount of debt per farmer household was Rs. 12,585 during NSS 59th Round, which increased by nearly 4 times to reach Rs. 47000 per agricultural household during the NSS 70th Round.

• Based on a survey of 4529 villages, the NSS 70th Round report tells us that among the major Indian states, Andhra Pradesh has the highest share of indebted agricultural households in the country (92.9%), followed by Telangana (89.1%) and Tamil Nadu (82.5%). Assam (17.5%), Jharkhand (28.9%), and Chhattisgarh (37.2%) are some of the major Indian states with lowest share of indebted agricultural households.

• The average amount of outstanding loan has been highest for Kerala (Rs. 2,13,600/-), followed by Andhra Pradesh (Rs. 1,23,400/-) and Punjab (Rs. 1,19,500/-). Some of the states with lowest amount of average outstanding loan are Assam (Rs. 3,400/-), Jharkhand (Rs. 5,700/-) and Chhattisgarh (Rs. 10,200/-).

• At the national level, about 60% of the outstanding loans have been taken from institutional sources, which includes Government (2.1%), Co-operative society (14.8%) and banks (42.9%). Among the non-institutional sources, agricultural/ professional money lenders (25.8%) have the major share in terms of outstanding loans.

• The report mentions that the share of institutional loans increases with rise in land possessed. For the agricultural households covered in the lowest size class of land possessed (less than 0.01 hectare), only about 15% of the outstanding loans were from institutional sources (government, co-operative society, bank), whereas the share was about 79% for the households belonging to the highest size class of land possessed (more than 10 hectares). This means that the land-poor households are more dependent on informal sources for borrowing money, which may be due to lack of proper collateral available among them.

• The average monthly income per agricultural household in India during the agricultural year July 2012- June 2013 was estimated at Rs. 6426/- whereas the average monthly consumption expenditure per agricultural household was Rs. 6223/- during the same time.

• Among the agricultural households having less than 0.01 hectare land (which also includes landless agricultural households), about 56% reported wage/ salary employment as their principal source of income and another 23% reported livestock as their principal source of income during the agricultural year July 2012- June 2013. Majority of the agricultural households, which possessed more than 0.40 hectare land reported cultivation as their principal source of income. The group of agricultural households which possessed little land (0.01 to 0.04 hectare) earned their income both from cultivation (42%) and wage/ salary employment (35%).

• Net receipt from farm business (cultivation and farming of animals) accounted for 60 percent of the average monthly income per agricultural household in the country during July 2012- June 2013. Nearly 32 percent of the average monthly income has been contributed by income from wages/ salary.

• There is an estimated total of 90.2 million agricultural households in rural India, which is 57.8 percent of the total estimated rural households during the agricultural year July, 2012- June, 2013.

• Uttar Pradesh, with an estimate of 18.05 million agricultural households, accounted for about 20% of all agricultural households in India. Among the major States, Rajasthan has the highest percentage of agricultural households (78.4%) among its rural households followed by Uttar Pradesh (74.8%) and Madhya Pradesh (70.8%). Kerala has the least percentage share of agricultural households (27.3%) in its rural households.

• About 45% of the total agricultural households in the country belongs to Other Backward Classes (OBCs). About 16% of agricultural households are from Scheduled Castes (SCs) and 13% are from Scheduled Tribes (STs). During the same period about 45% of the rural households of the country belongs to OBCs. SCs and STs, respectively, have a share of about 20% and 12% among the rural households.

• Agricultural households are dependent mainly on cultivation followed by wage/ salaried employment for their livelihood, as about 63.5% of the agricultural households reported cultivation as their principal source of income and about 22% reported wage/ salaried employment as their principal source of income.

• Agricultural activity (cultivation, livestock and other agricultural activities) has been reported to be the principal source of income for majority of the households in all the major states, except Kerala where about 61% of the agricultural households reported to have earned maximum income from sources other than agricultural activities. Among the major states, more than 80% of agricultural households from Assam, Chhattisgarh and Telangana reported agricultural activity as their principal source of income. More than 9% of agricultural households of Tamil Nadu, Gujarat, Punjab and Haryana have reported livestock as their principal source of income.

• About 93 percent of agricultural households in the country possessed some type of land other than ‘homestead land only' and little less than 7% possessed only homestead land. An estimated 0.1% of the agricultural households in rural India are landless. Among the agricultural households who possessed less than 0.01 hectare land, 70% possessed only homestead land. The share of landless agricultural households in the lowest size class of land possessed is estimated as 2.4%.

• In all major States, excepting Gujarat, Haryana, Kerala, Punjab and Tamil Nadu, more than 90% of agricultural households have both homestead and some ‘other type of land', whereas about 12% to 16% of agricultural households of these states possessed only ‘homestead land'. About 94% to 99% of agricultural households in all the states, except Haryana and Punjab, operated their land for agricultural activities.

• At the national level, around 78.5% of the agricultural households did not possess any land outside the village they were residing during the time of the survey. Among the households reported land possession outside the village, about 17.5% have land within the state itself and about 4% have land outside the state.

• In rural India, about 44% of estimated agricultural households have MGNREG job card. About 38% and 29% of agricultural households, respectively, in the lowest and the highest size class of land possessed have MGNREG job cards. The reported lower rate of possession of MGNREG job cards in lowest size class is noteworthy in the context of higher dependency of these households on wage/ salaried employment.

• More than 65% of agricultural households of Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Rajasthan, Tamil Nadu, Telangana and West Bengal have MGNREG job card at the time of the survey.

• At the national level, about 12 percent agricultural households did not possess any ration card as on date of the survey. BPL card was possessed by about 36 percent of the estimated agricultural households. About 5 percent agricultural households possessed Antyodaya cards which are issued to ultra-poor households.

• More than 90 percent agricultural households of Andhra Pradesh and Telangana possessed BPL ration card. Agricultural households possessing Antyodaya card are the highest in Uttar Pradesh (8.1%) followed by Karnataka (5.8%) and Jharkhand (5.8%). About 37% of agricultural households of Jharkhand and 24% of Odisha did not possess any ration card as on date of survey.

• Majority of the production of all crops such as paddy, wheat pulses, oilseeds etc. is sold off to either local private trader or mandi (except sugarcane). The lower share of sale to cooperative & Government agencies shows the lesser utilisation of procurement agencies, which provide Minimum Support Price (MSP) to selected crops.

• The data shows a lower level of awareness about MSP and even lower level of sale of these crops to procurement agencies. Except for sugarcane, only less than half of the households, which are aware about MSP, sold off their crop to procurement agencies. Even for the households reported sale to the procurement agency, the quantity sold is a very small percentage of the total sale by these households during the period.

• The reasons behind not selling to procurement agencies despite having awareness about MSP are: non-availability of procurement agency, no local purchaser, and better market price over MSP.

• Only a very small fraction of agricultural households insured their crops against possible crop loss since most people are not aware of the same.

• At the national level, average actual expenditure for crop production per agricultural household during July, 2012-June, 2013 is Rs. 2192/- During the same period, average receipts from crop production per agricultural household in the country is Rs. 5542/-.

• At the national level, average monthly expenditure for farming of animals is estimated as Rs. 1388/-. The average monthly receipts from this activity during the same period is Rs. 2604/-.

• At the national level, majority of the cultivating households accessed technical help from any of the listed agencies/ sources (like extension agents, KVKs etc.) during the period July, 2012- June, 2013. 'Progressive farmer' and 'radio/ TV/newspaper/ internet' are the two main sources accessed by the agricultural households for technical advice. Majority of the households found the recommended advice useful.


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