Skip to main content

Usurious moneylending prevails more in Gujarat than in other Indian states, suggests latest NSSO report

By Rajiv Shah
In a remarkable revelation, a new National Sample Survey Organization (NSSO) report, released early this month, has found that Gujarat has a higher proportion of indebted households which reported taking loan at very high interest rate – 25 per cent or more. Calculations, based on the data released by the NSSO, suggest that 64.6 per cent of the state’s indebted households took loan at such high rate – which can easily be interpreted to mean usurious moneylenders. Titled “Key Indicators of Debt and Investment in India”, the report has found that there is just one state of 21 whose indebted households may be depending so heavily on moneylenders – Jammu & Kashmir (69.3 per cent).
Based on NSSO’s 70th round, the data in the report say that there are 260 rural households in Gujarat out of every 1000 which reported outstanding cash loans. A breakup of the data suggest that there are 80 out every 1000 rural households which reported taking loan at an interest rate between 25 and 30 per cent, and another 88 out of 1000 which reported taking loan at an even higher rate of interest, i.e. 30 per cent and higher.
“This would mean that there are 168 out of every 1000 households which reported taking loan at a very rate of interest. Considering that there are in all 260 indebted households which reported outstanding loans in Gujarat, this would mean that a whopping 64.6 per cent households (168 every 1000 households) which reported taking loan at such high rate of interest!”, says an analysis based on the NSSO report.
No doubt, the NSSO report suggests that there are several other states which reported higher proportion of indebted households than Gujarat. Two states top: There are 591 households per 1000 in Telangana and 541 households per 1000 in Andhra Pradesh which reported having rural households with outstanding cash loans. Other states whose households reported a higher proportion outstanding cash loans than Gujarat are Bihar (291 households), Karnataka (464 households), Kerala (495 households), Maharashtra (313 households), Punjab (331 households), Rajasthan (374 households), Tamil Nadu (397 households), and Uttar Pradesh (296 households).
However, clearly, being indebted is one thing, and being indebted at a very high rate of interest is totally another. It is but natural for an economy in transformation -- especially the rural feudal seeking to become one with a strong capitalist agriculture based – for being dependent heavily on loan to substantially improve the economic status. Farmers would indeed need loan for necessary inputs like seeds, equipment, fertilizers, transportation, and so on.
But, it seems, the formal banking system has failed in this, one reason why a substantial percentage of indebted rural households reported taking at a rate of interest which is higher than 25 per cent.
The proportion of indebted households reporting outstanding loans at a very high rate (25 per cent or more) in Telangana and Andhra Pradesh is 30.8 per cent and 23.5 per cent, respectively, or less than half that of Gujarat. The all-India average comes to 40.1 per cent of the indebted households which reported taking loans at such high rates – households reporting outstanding cash loans were 314 out of 1000; 61 per 1000 reported taking loans at 25-30 per cent rate of interest, and 65 per 1000 reported taking loan at 30 per cent and above.
Indeed, taking loan at a very high interest rate – almost double of what the formal banking sector offers – should mean the farmer is, apparently, dependent on the informal sector for loan, especially the usurious moneylender. Basing on the NSSO report, a recent analysis on India said, “Between 2002 and 2012, the number of rural households with bank accounts more than doubled in number. Yet, rural households increased their borrowings in a significant way from private moneylenders, and not the organized financial sector.”
It added, despite a 120 per cent increase in rural households with bank accounts in the decade in question, “Indebtedness is more among poorer households, who borrow more from moneylenders and more for non-business use.” If this is true of India, it should be even truer of Gujarat.
A well known expert on the subject, an assistant professor at the Jawaharlal Nehru University, Himanshu, has been quoted as saying that the NSSO report is “a stark reminder that little has changed for farmers in the last decade. While formal credit flow has multiplied by four times in this period, small and marginal farmers have certainly not benefitted. The question is who has benefitted from this increased outflow to the agriculture sector.”
The NSSO report, prepared on the basis of the data collected in 2012-13, suggests that there were in all 76.5 per cent of the rural households in Gujarat with bank accounts, which is lower as many as nine major states of 21 – Haryana (84.3 per cent), Himachal Pradesh (95 per cent), Jammu & Kashmir (86.8 per cent), Kerala (89.8 per cent), Punjab (78.1 per cent), Rajasthan (77.3 per cent), Tamil Nadu (77.1 per cent), Uttaranchal (79.4 per cent), and Uttar Pradesh (77.9 per cent).
Even if Gujarat may have succeeded in improving upon its bank accounts under Prime Minister Narendra Modi’s Jan Dhan scheme, analysts wonder: How many of the account holders would be able to avail, if at all, loan to invest in agriculture?
---
A version of this article was first published HERE

Comments

TRENDING

Ganga world's second most polluted river, Modi's Varanasi tops microplastics pollution

By Rajiv Shah  Will the new report by well-known elite NGO Toxics Link create a ripple in the powerful corridors of Delhi? Titled “Quantitative analysis of microplastics along River Ganga”, forwarded to Counterview, doesn’t just say that Ganga is the second most polluted river in the world, next only to Yangtze (China). It goes ahead to do a comparison of microplastics pollution in three cities shows Varanasi – the Lok Sabha constituency of Prime Minister Narendra Modi – is more polluted compared to Kanpur and Haridwar.

How real is Mamata challenge to Modi? Preparing for 2024 'khela hobey' moment

By Prof Ujjwal K Chowdhury*  Third time elected West Bengal Chief Minister, Mamata Banerjee is on a whirlwind tour of Delhi, meeting everyone who matters within and beyond the government, the Prime Minister, the President, some Cabinet ministers, Sonia and Rahul Gandhi, several other opposition leaders, et al.

Did Modi promote Dholavira, a UNESCO site now, as Gujarat CM? Facts don't tally

By Rajiv Shah  As would generally happen, Prime Minister Narendra Modi’s tweet – that not only was he “absolutely delighted” with the news of UNESCO tag to Dholavira, but he “ first visited ” the site during his “student days and was mesmerised by the place” – is being doubted by his detractors. None of the two tweets, strangely, even recalls once that it’s a Harappan site in Gujarat.

Madhya Pradesh tops India's 145 instances of 'anti-Christian atrocities' this year

Counterview Desk  A report prepared by the Religious Liberty Commission of the Evangelical Fellowship of India (EFI), founded in 1951 as the national alliance of evangelical Christians of the Protestant denomination, in its just-released report, “Hate and Targeted Violence against Christians in India: Half Yearly Report 2021”, has said that an analysis of 145 cases of violence it has documented against Christians, mainly by non-state actors, “stems from an environment of targeted hate.”

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

UP arrest of 'terrorists': Diverting attention from Covid goof-up, Ram temple land scam?

By Advocate Mohammad Shoaib, Sandeep Pandey* That corruption is rampant in police department is a common experience. However, there is another form of corruption which devastates lives of individuals and their families. It has now emerged as a common phenomenon that police more often than not register false cases because of which individuals have to spend number of years in jail.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Demolition drive: Why aren't high-end hotels, farmhouses treated same way as Khorigaon?

By Our Representative A public hearing, sponsored by the civil rights group National Alliance of People’s Movements (NAPM) to hear the affected citizens of Khorigaon, off Faridabad, Delhi NCR, has seen local people complaining how their houses are being demolished even as the entire area was converted into a prison through heavy police deployment.

How BSF, police, court turned Bangladeshi woman slave victim into accused in crime

Counterview Desk  Civil rights leader Kirity Roy has strongly objected to the manner in which the Border Security Force (BSF) , the police and the judiciary in West Bengal have treated a 35 years old Bangladeshi woman victim of human trafficking, who was subjected to sexual exploitation for 15 long years, has been declared guilty of violating the Foreigners Act, violating all human rights norms.

If not Modi, then who? Why? I (an ordinary citizen) am there! Main hoon naa!

By Mansee Bal Bhargava*  The number of women ministers is doubled in early July from the first term after cabinet reshuffle by the present government led by Narendra Modi. While there were 06 women ministers in the previous term, this term there are 11. The previous two governments led by Dr Manmohan Singh had 10 women ministers in each tenure. Are these number of women ministers something to rejoice in the near 75 years of independence? Yes maybe, if we think that things are slowly improving in the patriarchal system. This change is less likely to achieve gender balance in the parliament otherwise we require more than 11 as per the 33% reservation . This change is also less likely because the men politicians’ inability to handle the country’s mess is becoming more and more evident and especially during the corona crisis. Seems, the addition of more women ministers may be a result of the recent assembly elections where women played a decisive role in the election results. For example