AN ECONOMIC ANALYSIS OF RURAL INDEBTEDNESS IN TAMIL NADU

V.R.B. SUKUNA¹, A. VIDHYAVATHI²*, S. PADMA RANI^3
1Department of Agricultural Economics, Tamil Nadu Agricultural University, Coimbatore, 641003, Tamil Nadu, India
²Department of Agricultural Economics, Tamil Nadu Agricultural University, Coimbatore, 641003, Tamil Nadu, India
³Department of Agricultural Economics, Tamil Nadu Agricultural University, Coimbatore, 641003, Tamil Nadu, India
* Corresponding Author : senthilvidhya_cbe@yahoo.co.in

Received : 04-05-2019     Accepted : 26-05-2019     Published : 30-05-2019
Volume : 11     Issue : 10       Pages : 8467 - 8471
Int J Agr Sci 11.10 (2019):8467-8471

Keywords : Indebtedness, Composite index, Rate of interest, Debt-income ratio, Debt-asset ratio
Conflict of Interest : None declared
Acknowledgements/Funding : Authors are thankful to Agricultural College and Research Institute (AC & RI), Tamil Nadu Agricultural University (TNAU), Coimbatore, 641 003, Tamil Nadu, India
Author Contribution : All authors equally contributed

Indebtedness has been a consequential issue in India mainly due to its social and economic dimensions and consequences. An excessive accumulation of debt along with reduced income would cause decline in economic well-being thus followed by social exclusion and poverty. In this context this study is an attempt to measure the extent of indebtedness and to bring out the factors that cause indebtedness among rural households. For this study, on the basis of composite index, a highly developed district (Erode) and least developed district (Dharmapuri) has been chosen. Debt income ratio and Debt asset ratio has been used to find the ability of households to repay debt and probit model has been used to bring out the factors that influence indebtedness. The survey shows that non-agricultural labour households were more indebted and most of the sample households were indebted to institutional sources.

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