ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Indebtedness among Farmers in Punjab

While debt among farmers is no longer considered undesirable, ever-mounting debt and reduced repayment capacity surely are. The existing literature has found a deep connection between indebtedness and suicides among farmers and perceived it as a reflection of growing agrarian distress. Based on the findings of a primary survey conducted in Punjab, we try to assess the debt position of Punjab’s farmers, and present the magnitude and burden of debt, highlighting the farmers’ debt repaying capacity. The source and purpose of credit are discussed in detail and the factors affecting indebtedness have also been explored.

Indebtedness among Farmers in Punjab

The availability of timely and adequate amount of credit at affordable rates of interest is a prerequisite for improving rural livelihoods and accelerating rural development in agrarian economies like India. Around 85% of the ope­rational landholdings in India belong to small and marginal farmers, who are engaged in cultivating around 44.6% of the total operated area (Ministry of Agriculture 2014). Due to the presence of this huge section of poor and resource-deficient farmers, the credit requirement is enormous and highly unavoidable, which, in the presence of low repayment capacity, leads to indebtedness.

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Updated On : 5th Jul, 2021


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