Indebtedness among Rural Households-A Case for Bathinda district of Punjab

The present paper is an attempt to assess and analyses the debt position of rural households of Bathinda District of Punjab. The study reveals that 81.18 percent of the rural households are under debt in Bathinda District. The average amount of debt per household is the highest for farm households and the lowest for other households. Source wise, agricultural labour, nonagricultural labour and artisan households have similarities in pattern. For these households, major sources of debt are the large farmers, traders and commission agents. For the farm households, the major sources of debt are the commercial banks, cooperative banks and commission agents. The farm households availed loans mainly for the purchase of farm inputs and mechanical equipments. The agricultural labour, non-agricultural labour, artisan and other households have availed the maximum proportion of the total debt for family maintenance expenditure. The farm households and the other households have availed the maximum amount of debt at lower rates of interest but, the agricultural labour, non-agricultural labour and artisan households have availed the maximum amount of debt at higher rates of interest. These households are still depending upon non-institutional sources which charge exorbitant rates of interest. The estimates of regression coefficient suggest that the variations in the magnitude of indebtedness of the rural households are explained to a large extent by the ratio of credit from the non-institutional sources, family size, income from subsidiary occupations and farm-size. The contribution of these explanatory variables is statistically significant.