Average income level of a rural household is just about one-fifth the national per capita income as per a NSO (National Statistical Office) survey conducted during Jan-Dec\u20192019. More concerningly, the bottom 20% of the population fare much worse. The saving grace is that average debt level is just about 60% of annual income and almost 70% of it is coming from institutional sources, sharp turnaround from the times when local moneylenders called the shots. Here is an attempt to look at the details of the survey.<\/p>\n
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NSO carries out a variety of surveys, called National Sample Survey (NSS), to assess the ground situation related to a specific aspect of the economy. The current survey was carried out under 77th<\/sup> round, which included two subjects, landholdings and indebtedness of rural agriculture households, surveyed separately until then. Information from 58,000 households were collected for the survey.<\/p>\n The survey classifies rural India into two categories based on the primary source of income – agricultural households (AH), those dependent upon farming as primary course of income and non-agricultural households (NAH). As per the survey, there are a total of 17.2 crore households in rural India of which, 9.3 crore or 54% are classified as AH. However, the dependency of rural economy on agriculture is higher than this because almost 50% of NAH work as casual labour, most of them, on large farms. The survey analyses the income pattern of agricultural households only.<\/p>\n As per the survey, average income earned by an AH is Rs 10,218 per month, increase of nearly 8% CAGR since the last survey six years ago. (While the survey doesn\u2019t give information on income of NAH, it is about 18% lower than AH as per another survey done by NABARD). With average of 4.5 members per household, per capita income works out to just about Rs 27,000 per annum, almost one-fifth that of national average per capita income of Rs 125,000. The problem is compounded by the skewed pattern of distribution. Income for households having landholding between 0.01 and 1.00 ha was only Rs 7,522, just 12.5% that of landholders with more than 10 ha of land. More concerningly, almost 20% of households earned as little as Rs 2,500 per month or Rs 560 per person per month as per another survey carried out by NABARD two years before this one.<\/p>\n While the households are classified as agricultural, they do not generate all of their income from agriculture, as some members could also be engaged in other trade. As per the dis-aggregation, an average household receives only about 40% of income from crop production whereas another 40% is received as wages and 16% from livestock farming. The share of crop production in total income has declined from about 50% in the last survey. This is actually a healthy trend as it points to diversification and reduces the vulnerability of households to crop failure.<\/p>\n An interesting aspect of the survey is that households with less than 0.01 ha landholding have higher income than those with 0.01-1.00 ha, aided by higher wages and receipt from live stocks. It appears that <0.01 ha group is spending significant amount of time in other activities which is supplementing their crop income \u00a0whereas 0.01-1.00 ha group is focussing more on farming where the incremental earning is limited.<\/p>\n Other than the poor earnings, the other unfortunate part of agricultural households is that despite being dependent upon agriculture as primary source of income, 70% of them own less than one hectare of land (equal to a plot measuring 100 meters by 100 meter). At the other end of spectrum are about 2 lakh rich households who have over 10 hectares of land, most of them being in the state of Punjab and Haryana.<\/p>\n The survey also looked at the indebtedness of these households with nearly half of them being under debt. Average debt level stands at Rs 75,000. While the debt level is not huge, the problem arises because these households have very little savings and any exigency leads to significant increase in debt level. This is borne out by the fact that non-agriculture purpose such as education, medical, marriage, consumption etc accounts for more than 90% of loan taken by households with <0.01 ha land and 71% for 0.01-0.04 ha group. The silver lining is that almost 70% of debt is coming from institutional sources, saving them from usurious interest rate. Debt level ranges from Rs 27,000 for households with less than 0.01 ha to Rs 95,500 for those with 1-2 ha land, making 1-2 ha group more vulnerable.<\/p>\n It would be pertinent to recall some more of the findings of NABARD survey. As per that, NAH are more distressed than AH because their earnings is almost 20% lower. Another important finding of the survey was that that as much as 80% of NAH are dependent on only one person for their livelihood in contrast with only 13% in case of AH. Possibly, there is a need to prepare an independent strategy for NAH such as encouraging one member of these households to engage in livestock farming, dairying etc.<\/p>\n","protected":false},"excerpt":{"rendered":" Average income level of a rural household is just about one-fifth the national per capita income as per a NSO (National Statistical Office) survey conducted during Jan-Dec\u20192019. More concerningly, the bottom 20% of the population fare much worse. The saving grace is that average debt level is just about 60% of annual income and almost […]<\/p>\n","protected":false},"author":8,"featured_media":14402,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[857],"tags":[],"class_list":["post-14401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","membership-content","access-restricted"],"yoast_head":"\n