Indebtedness in India- A Region Wise Analysis Leveraging Machine Learning By IJISRT

Abstract

The risk of indebtedness across region level is higher among the households having less human and physical assets and human resources. However, because of their better borrowing capacities, the extent of indebtedness among them is significantly higher than other segment of the rural society. The same is true about the households self-employed in various agricultural and non-agricultural activities in the rural areas. The region level analysis also rejects the contention that the higher consumptive expenditure of the rural people as a cause of their risk of indebtedness whereas the extent of indebtedness confirms that consumptive expenditure plays a major role in their indebtedness. Similarly, the hypothesis of agricultural prosperity and indebtedness going together lacks wider generalization for household located in all the regions except North-West states in Logistic regression and in North-Western, Eastern and Southern region in Tobit regression. Exposure of rural households to higher risk and uncertain situations like droughts, floods, crop failure due to pest attack pushes rural households deeper into debt.