explain the extent of rural indebtedness in india. what are its effect

Rural indebtedness is a serious problem in India. According to the estimates of RBI, the average debt of rural households in 2001 stood at Rs 2192. It can be said that in 1999-2000 nearly 25% of the rural households were under debt. A state wise analysis reveals that the incidence of indebtedness is found to be higher in the states Andhra Pradesh, Assam, Gujrat, Haryana, Kerala, Punjab, Rajasthan, Jammu and Kashmir. 

The following are some of the consequences of rural indebtedness.

  1. Indebtedness has increased the incidence of poverty and destitution in rural areas. 
  2. In order to escape indebtedness people plight from rural areas to urban areas.
  3. Indebtedness has reduced many farmers and cultivators to mere landless labourers.  
  4. Rising indebtedness has increased the unrest among the rural popualtion. Incidences of farmer suicides have increased tremendously.  

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