Their annual income may just be enough to repay what they borrowed; Telangana, A.P., Karnataka top the list with over 70% indebted families 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, according to a recent survey by the National Bank for Agriculture and Rural Development (NABARD). The NABARD All India Rural Financial Inclusion Survey 2016-17 covered a sample of 1.88 lakh people from 40,327 rural households. Only 48% of these are defined as agricultural households, which have at least one member self-employed in agriculture and which received more than Rs. 5,000 as value of produce from agricultural activities over the past year, whether they possessed any land or not. 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%.
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.