As India has no structure, either political or social, that can ensure "entitlement" to food, there is a need to examine how rural finance can ensure poverty alleviation.
The relentless winds of market forces, aided by corporate views, it is feared, might blow away the tiny villages across India. Poverty is on the increase, mostly rural in origin, while the middle class and the corporate sector are climbing up the ladder of success. That the rural India did not shine has been amply indicated in the general elections of the year bygone. Ironically, even as the country harvests "bumper" crops, and builds up the buffer stocks, more than a third of India's population, principally women and children starve. Food prices are on the upswing. As India has no structure, either political or social, that can ensure "entitlement" to food, there is a need to examine how rural finance can ensure poverty alleviation. The following table gives an idea of the extent of rural indebtedness in India.
Table 1 clearly shows that close to 50% of farmer households in India are indebted. The National Sample Survey Organization's (NSSO) "Situation Assessment Survey of Farmers" from January - December 2003 has found that 43.42 million of the estimated 89.35 million farmer households (48.6%) are indebted. The cut-off limit for a farmer household to be classified as indebted was Rs. 300, either in cash or in kind, at the time of the survey. Considering this low threshold value, the data in the above table is a real eye opener. Additionally, there are some very surprising revelations on the subject of rural indebtedness.
The most important finding of the survey was that Uttar Pradesh, Andhra Pradesh, Maharashtra, West Bengal and Madhya Pradesh had more than 50% of the indebted rural farm households, with Andhra Pradesh at the peak with 82%. Contrary to the popular belief of Kerala State being a "socially advanced State", it was a great revelation that the state had a very high percentage of rural indebtedness at 64.4%. In fact both Kerala and Punjab are on par with 64.4% and 65.4% rural indebtedness respectively. This again, is an eye opener, because, Punjab is the "cradle" of the so-called green revolution and one would have expected not see such high percentage of rural indebtedness in the State. Yet, that was not the case. |
