The Hindu Business Line : Debt burden of rural households up 4 pc since 1991: Survey

POST liberalisation, rural India has become more indebted while urban households have been able to reduce their debt liabilities according to the findings of the National Sample Survey Organisation (NSSO).

According to the NSSO figures released on Thursday, the incidence of indebtedness in rural households has increased by 4 per cent to 27 per cent during January-December 2003 as compared to 23 per cent in 1991. In the case of urban households, however, the percentage has come down from 19 per cent in 1991 to 18 per cent in the first six months of 2003, according to an official release.

It also points out that the rural households account for around Rs 1,12,000 crore, which is around 63 per cent of the aggregate outstanding debt of Rs 1,77,000 crore till June 2002.

The survey found widespread indebtedness in the rural areas of Andhra Pradesh, Kerala, Rajashtan and Karnataka where the average indebtedness was more than 30 per cent.

The survey found that the share of debt for non-business purpose was very high — as high as 76 per cent and 85 per cent, respectively for rural and urban households which owned assets valued at less than Rs 15,000.

The survey found that non-institutional agencies played a major role in advancing credit to the households, particularly in rural India. Among the non-institutional agencies, professional moneylenders were of prime importance during the year preceding the survey. These lenders accounted for about 20 per cent and 13 per cent of the debt in rural and urban areas.

Also, it was found that the debt incurred for non-business purpose of the households accounted for about 47 per cent and 75 per cent of the outstanding debt of households in rural and urban areas respectively.

About 73 per cent of the households in India were located in the rural areas. Among the rural households, about 60 per cent were cultivators with at least 0.002 hectare of land during the last 365 days preceding the date of survey, which was conducted in 2002.