Indebtedness of Indian Farmers and Role of Surveys in Policy-Making

 Indebtedness of Indian Farmers and Role of Surveys in Policy-Making

Indebtedness among Indian farmers is a long-standing challenge, arising from crop failures, fluctuating market prices, inadequate access to institutional credit, and rising input costs. According to the Situation Assessment Survey (SAS) of Agricultural Households, a significant portion of rural households rely on non-institutional lenders, often at high interest rates. Such dependence exacerbates financial vulnerability, leading in extreme cases to distress, including farmer suicides.

The All-India Debt and Investment Survey (AIDIS) complements this understanding by providing a nationwide picture of household debt, asset ownership, and investment patterns. By capturing data across rural and urban households, AIDIS identifies regions with high indebtedness, sources of loans, and asset inequalities. Together, these surveys offer granular, evidence-based insights into farmers’ economic conditions, enabling targeted policy interventions.

Data from SAS and AIDIS inform government schemes such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), Pradhan Mantri Fasal Bima Yojana (PMFBY), and subsidised credit under Kisan Credit Cards (KCC). They also guide the Reserve Bank of India and financial institutions in interest rate policies, credit allocation, and financial inclusion strategies.

Moreover, periodic surveys help in tracking the impact of policies, assessing inequalities, and designing new programmes for rural welfare. By strengthening evidence-based policy-making, these surveys reduce information asymmetry and support inclusive growth.

Conclusion:
Farmer indebtedness is multifaceted, but tools like SAS and AIDIS are vital for understanding the root causes and shaping policies that enhance credit access, income stability, and financial resilience among India’s agricultural households.