IDEAS home Printed from
   My bibliography  Save this paper

Rural indebtedness : concept, correlates and consequences: a study of four tribal villages in the North Lakhimpur subdivision, Assam


  • Mitra, MK
  • Roy, DC
  • Mishra, SK


Indebtedness has been acknowledged as one of the most infamous stumbling blocks in the way of rural prosperity. It is cancerous, self-perpetuating, malignant and maleficent. It abates agricultural production, abashes social psyche, aggravates inequalities in the distribution of socioeconomic opportunities and benefits, arrests social progress and misdirects social efforts. In the Indian rural context, indebtedness characterizes: (i). unproductive usage of loan, (ii). usurious ensnaring of the borrower, (iii). captivation of productive resources, (iv). exercise of coercive and exploitative economic and social powers by the lender, (v). compulsion, plight, misery and feeling of guilt and helplessness, and (vi). erosion of social status of the borrower. In this study we propose an empirical study to measure indebtedness, identify its correlates and to assess the consequences of indebtedness on the productive and distributive performance on the rural economy. We have collected primary data from four tribal villages. The selection of these villages has been made purposively. We hold the opinion that the tribal population in the rural areas of Assam has been least exposed to the credit programmes launched by the public agencies and hence a study of indebtedness provides us with a deeper insight in the problem. We have observed that in the Indian context rural indebtedness is resonant with the overtones of unproductive usage, usurious ensnaring and deplorable condition of the poor farmers and agricultural labourers. We have surveyed four tribal villages and based on the data thus collected identified some measures of indebtedness that can help us operationally in analyzing the incidence, process and impacts of rural indebtedness. These measures are per capita loan and per capita loan per agricultural asset held by the households and these measures are good representatives of the degree of indebtedness. We have analyzed the productive and distributive effects of indebtedness and found that it leads to decline in agricultural productivity, captivation of productive resources and aggravation of inequalities in the rural community. Further, our finding is that indebtedness is initiated by unproductive expenditure. This in turn captivates agricultural assets, abates productivity and reduces the repaying capacity of the borrower. Our study may suggest that in order to ameliorate the conditions of the indebted rural mass we have to motivate them to minimize conspicuous consumption, especially if the households cannot afford it without borrowing. Educational planning may help us to attain this goal of making the rural mass aware of the merits of prudence and the demerits of conspicuous consumption. Further, to stop the captivation of productive assets, institutional loan should be provided on easy terms. This objective may be attained by making the cooperative and bank loans easily available.

Suggested Citation

  • Mitra, MK & Roy, DC & Mishra, SK, 1986. "Rural indebtedness : concept, correlates and consequences: a study of four tribal villages in the North Lakhimpur subdivision, Assam," MPRA Paper 1824, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1824

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Baylis, Kathy & Mallory, Mindy & Songsermsawas, Tisorn, 2015. "Effects of credit and market access on farm gate prices in India," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205434, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. SK Mishra & Prasen Daimari, 2005. "Poverty and Inequality in Rural Assam An Indicative Study of Seven Villages in Udalguri Subdivision, Assam (India)," Others 0504007, EconWPA.

    More about this item


    Rural indebtedness; correlates; consequences; measures of incidence; distributive effects; causal chain; Assam; primary data; tribal villages; poverty;

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G0 - Financial Economics - - General
    • R29 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:1824. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.