Big Worry: 'Household Debt Is Growing 10 Times In Metros'

India is slowly becoming a heavily indebted country with the average amount owed by each family jumping a whopping seven times in urban areas and more than four times in the hinterland during the period 2002 and 2012, shows a survey by the National Sample Survey Organization (NSSO).

In 2012, as much as 22% of urban households were indebted and the average debt per family was Rs 84,625, up from Rs 11,771 in 2002, while in rural areas, 31% of households were indebted compared to 27% in 2002 with average debt rising to Rs 32,522 in 2012 from Rs 7,539 in 2002.

As on 30.6.12, the 'debt-asset' ratio at the all-India level was 3.7% for urban areas and 3.23% for rural areas.

But what's worse is the plight of farmers. Over 50 percent of agricultural households are in debt; and 42 percent of them owe money to banks and 26 percent owe moneylenders. Debt levels are as high as 93% in Andhra Pradesh, 89% in Telangana and 82.5 percent in Tamil Nadu, shows key indicators from the NSSO (National Sample Survey Organisation) report. Jharkhand, Assam and Chhattisgarh ) were the least indebted states.

This 'Situation assessment survey of agricultural households' showed 51.9 percent of all agricultural households were indebted, with the average amount of unpaid dues being Rs 47,000.

About 60 percent of the outstanding loans were taken from institutional sources which included Government, Co-operative society and banks. Among the noninstitutional sources, agricultural/ professional money lenders (25.8 percent) had the major share in terms of outstanding loans, they survey revealed. Marginal land holding households suffer the most with only 15% of their credit from institutional sources.

The report further found that about 44% of the estimated agricultural households in the country had an employment guarantee scheme or MGNREGA job card. However, only 38% in the lowest land class (less than 0.01 ha) had job cards.

Another NNSO survey titled 'Key Indicators of Debt and Investment in India', found that the average value of assets among rural households was about Rs 10 lakh while in urban areas it was nearly Rs 23 lakh.

Land and building were found to be the two major components of household assets. In the rural areas, land and buildings together, accounted for 94% share in the total value of assets while in urban areas, they accounted for 92% of total assets.

Moreover, incidents of indebtedness (IOI)  in rural India was the lowest (16.9%)  for ST households and highest (35.7%) for OBC households. In urban India too the trend was similar with the lowest IOI for ST households (16.4%) and the highest that of OBCs(26%).