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Correlates of agrarian indebtedness in rural India

Correlates of agrarian indebtedness in rural India PurposeThe purpose of this paper is to understand the factors determining the incidence and extent of indebtedness among agricultural households in rural India.Design/methodology/approachThis study is based on a nationally representative survey carried out under the 70th Round of the National Sampling Survey Office (NSSO) across rural India. Data on household characteristics, farming characteristics, indebtedness and extent of outstanding credit have been extracted from the comprehensive survey data. Four research hypotheses have been formulated and tested using simple statistical techniques. Further, using the Heckman Selection Model, the study assesses the factors determining the agrarian indebtedness among households in rural India.FindingsThe results from the descriptive analysis show that there is a significant difference in socio-economic and farm characteristics of indebted and non-indebted households. Further, the level of indebtedness differs across sources of the loan, landholding sizes and geographical locations among agricultural households. The results of regression analysis clearly indicate that household characteristics, farm characteristics and sources of loan determine both the incidence and extent of indebtedness among agricultural households.Research limitations/implicationsThe main limitation of the study is that only the data giving information regarding the amount of outstanding loans have been collected, and there is no information regarding the amount of credit availed, the purpose and the due date of payment. Further, there is scope to improve the robustness of the empirical model by adding and modifying explanatory variables.Originality/valueThere are only a limited number of empirical studies providing an understanding of the factors determining the indebtedness of agricultural households in rural India. Hence, this study is a good value addition to the existing literature. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Agribusiness in Developing and Emerging Economies Emerald Publishing

Correlates of agrarian indebtedness in rural India

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References (39)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2044-0839
DOI
10.1108/JADEE-07-2017-0074
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to understand the factors determining the incidence and extent of indebtedness among agricultural households in rural India.Design/methodology/approachThis study is based on a nationally representative survey carried out under the 70th Round of the National Sampling Survey Office (NSSO) across rural India. Data on household characteristics, farming characteristics, indebtedness and extent of outstanding credit have been extracted from the comprehensive survey data. Four research hypotheses have been formulated and tested using simple statistical techniques. Further, using the Heckman Selection Model, the study assesses the factors determining the agrarian indebtedness among households in rural India.FindingsThe results from the descriptive analysis show that there is a significant difference in socio-economic and farm characteristics of indebted and non-indebted households. Further, the level of indebtedness differs across sources of the loan, landholding sizes and geographical locations among agricultural households. The results of regression analysis clearly indicate that household characteristics, farm characteristics and sources of loan determine both the incidence and extent of indebtedness among agricultural households.Research limitations/implicationsThe main limitation of the study is that only the data giving information regarding the amount of outstanding loans have been collected, and there is no information regarding the amount of credit availed, the purpose and the due date of payment. Further, there is scope to improve the robustness of the empirical model by adding and modifying explanatory variables.Originality/valueThere are only a limited number of empirical studies providing an understanding of the factors determining the indebtedness of agricultural households in rural India. Hence, this study is a good value addition to the existing literature.

Journal

Journal of Agribusiness in Developing and Emerging EconomiesEmerald Publishing

Published: May 15, 2019

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