The Burden of Debt in Indian Agriculture

Abstract

THE QUESTION of agricultural debt in India has always excited considerable interest; however, the approach has been somewhat alarmist. Most writers tend to depict the debt burden as a millstone round the neck of the Indian farmer. They have argued, with supporting facts and figures, that the weight of debt is not only heavy, but is becoming heavier with the lapse of time. The central and state governments have also shown great concern about this problem and statute books have been filled with measures to check this evil. The blame for this deterioration is equally apportioned between the usurious moneylender and the improvident peasant. On the other hand, the simple truth that borrowing is not a unique feature of Indian farming has not been adequately appreciated; that credit lubricates the engine of production and heightens its efficiency is often lost sight of; that, in the very nature of things, reliance on credit must increase pari pasu with increasing commercialisation and monetisation of agriculture is perhaps totally missed. In recent years, there has been a proliferation of statistical material; and a close look on the data has led the present writer to conclude that the attitude of most authors on the subject in this country has been unduly conservative. This paper purports to re-examine the question of agrarian debt in India.