• More than half the agricultural households in the country have outstanding debt, and their average outstanding debt is almost as high as the average annual income of all agricultural households.
• NABARD found that 52.5% of the agricultural households had an outstanding loan on the date of the survey, and thus were considered indebted. For non-agricultural households in rural India, that figure was 10 percentage points lower, at only 42.8%.

Higher liability

• Agricultural households reporting any outstanding debt also had a higher debt liability compared with non-agricultural ones.
• According to the survey, the average annual income of an agricultural household is Rs. 1.07 lakh. That is barely Rs. 2,500 more than the average outstanding debt of indebted farm households.
• The biggest reason for taking loans among agricultural households was capital expenditure for agricultural purposes, with a quarter of all loans taken for this purpose.
• While all classes of farmers had debt, the highest incidence of indebtedness came from those owning more than two hectares of land. In that category, 60% of households are in debt.
• Among small and marginal farmers owning less than 0.4 hectares, slightly less than 50% of the households were in debt. Those with more land were more likely to have multiple loans.

State figures

• The southern States of Telangana (79%), Andhra Pradesh (77%), and Karnataka (74%) showed the highest levels of indebtedness among agricultural households, followed by Arunachal Pradesh (69%), Manipur (61%), Tamil Nadu (60%), Kerala (56%), and Odisha (54%).
• Looking at loans taken between July 2015 and June 2016, the survey found that farm households took less than half their loans from commercial banks. While 46% of the loans were taken from commercial banks, and another 10% from self-help groups, almost 40% were taken from non-institutional sources such as relatives, friends, moneylenders and landlords.

Source: The Hindu.