Rural Indebtedness in Malwa Region of Punjab

Abstract

Punjab is no more a state of ever-booming agriculture as it is facing economic as well as social crisis. The crisis in agriculture has revealed itself in the form of stagnation of crop productivity, rising cost of cultivation, declining profit margin from cultivation, shrinking employment and rising indebtedness. The agrarian crisis that has rampaged through rural India for the past few years has clearly been related with the rising burden of indebtedness among the households. The present study looks into the various aspects of indebtedness among the rural households in Malwa region of Punjab. The analysis revels that the households belonging to Western Malwa are under the higher burden of debt. Around one-third of the total loans has been taken at the rate of interest varying from 10 to 20 percent. An average household is paying higher interest rate to non-institutional sources. Commission agents and professional money lenders still dominate in rural areas to provide the credit and charge a very high interest rate. In Malwa region, an average household has been paid higher interest rate for unproductive purpose which is main reason behinds indebtedness among them.