Farm debt shows little decline, but incomes rise by 12% per annum: Survey

Almost 53 per cent of agricultural households in India is under debt, a number which has not gone down by much between 2012-13 and 2015-16, a survey by the National Bank for Agriculture and Rural Development (Nabard), compared with the last Situational Assessment Survey of NSSO, showed, though the quantum of average loan per household rose by almost 122 per cent during the same period.

The Nabard survey released on Thursday also showed that the average income of Indian farmers grew at a compound rate of 12 per cent per annum between 2012-13 and 2015-16. 

This, if accurate, is more than the compound annual growth rate (CAGR) in income as estimated by a high-powered government panel on doubling income by 2022. 

The panel under the chairmanship of Chief Executive Officer of National Rainfed Area Authority Ashok Dalwai had pointed out that the real income of farmers needs to register a CAGR of 10.4 per cent in order to double by 2022.

The Nabard survey showed that during 2015-16, the income of farmers in 19 out of the 29 states was above the all-India average and 15 states recorded an annual compound growth rate of above 10.5 per cent between 2012-13 and 2015-16.

“In agricultural households, cultivation contributed to 34 per cent of the income, while in non-agricultural households, wages contributed the bulk 54 per cent of the incomes,” the survey said.

The Nabard survey was done in association with the Academy of Management Studies between July 1, 2015, and June 30, 2016, covering 29 states that included 40,327 households and a population of 187,518. 

The Nabard survey showed that in 2015-16, Telangana showed the highest incidence of indebtedness (79 per cent), followed by Andhra Pradesh (77 per cent), and Karnataka (74 per cent). The National Sample Survey Office survey of 2012-13, too, had found the highest incidence of indebtedness in Andhra Pradesh, followed by Telangana, Tamil Nadu, and Assam.

“Under the Nabard Financial Inclusion Survey, a household was considered indebted if it had any outstanding loan on the date of the survey. The households that confirmed the presence of any outstanding loan on that specific date was considered indebted,” the survey said.

Around 43 per cent of non-agricultural households were reportedly indebted at the time of the survey, taking the total rural households that reported an incidence of indebtedness to 47.4 per cent.

Around 60.4 per cent of the households, according to the Nabard survey, had borrowed money exclusively from institutional sources, while 30.3 per cent borrowed only from non-institutional sources, and 9.2 per cent of agricultural households borrowed from both.

The survey also found that around 88 per cent of rural households and 55 per cent of agricultural households had a bank account and the average savings per annum per household was Rs 17,488. 

About 26 per cent of agricultural households and 25 per cent of non-agricultural households were covered under insurance, but the penetration of crop insurance and insurance for livestock was less than 8 per cent.

Similarly, 20.1 per cent agricultural households, against 18.9 per cent non-agricultural households, have subscribed to pension schemes.