Rural households have higher debt than urban counterparts: NSSO report

The debt in rural households is higher, even though their total assets are less than urban households  

By Jitendra
Published: Thursday 11 February 2016
Livestock and poultry constitute 1.6 per cent of all assets in India

A new survey by the National Sample Survey Organisation (NSSO) shows that rural households have higher debts than their urban counterparts. At the same time, an urban household owns more than double the asset than that of a rural household. A rural household, on an average, owned assets of Rs 10 lakh, while an urban household owned Rs 23 lakh worth of assets. Of the total, 31.4 per cent rural households are under debt as opposed to 22.4 per cent urban households.

According to the 70th round of "Household Assets and Liabilities" survey, the debt to asset ratio of urban households is 3.7 whereas the ratio for rural households stands at 3.2. This means that the average urban household has more debt than asset in comparison to rural household. 

Assets include all items that are owned by the household and have monetary value. These includes physical assets like land, buildings, livestock, agricultural machinery and implements, non-farm business equipment, all transport-related equipment, financial assets like dues receivable on loans advanced in cash or kind, shares in companies and cooperative societies, banks, national saving certificates and the like, deposits in companies, banks, post offices and with individuals. Land and building jointly constitute 94 per cent of all assets, followed by machinery equipments at 2.8 per cent, livestock and poultry at 1.6 per cent.

Demographical division of assets

Non-agriculture households have more than double the assets, in terms of monetary value, as compared to agriculture households. Households headed by females, both farming and non-farming ones, lag in asset value as compared to male-headed households. The difference in the ratio, however, is larger in agriculture households than the non-agriculture ones.  

The gap in the asset value of the highest 10 per cent and lowest 10 per cent households, ranked by income, is much higher in urban areas versus the rural areas.

The lowest 10 per cent of India’s rural households have an average asset value of Rs 25,071. The lowest 10 per cent of the urban households, on the other hand, have an average asset value of Rs 291, showing that urban poor are at the bottom of the economic ladder. The top 10 per cent rural households, ranked by assets, have average assets worth Rs 57 lakh. The top 10 per cent of the urban population, on the other hand, have average asset of Rs 1.46 crore. 

Assets in various states

The ranking of states in terms of their rural asset values has not changed much in last three decades. Haryana, followed by Punjab and Kerala, have maintained their highest ranking in terms of average asset value. Orissa stands at the lowest rung of the ladder. There are only seven states where rural assets have increased in the last two decades. These are Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra, Punjab and Tamil nadu. Urban assets have not changed sharply in the same period.

State-wise average asset value for rural households
  • Haryana- Rs 46.17 lakh
  • Punjab- Rs 42.95 lakh
  • Kerala- Rs 27.30 lakh
  • West Bengal- Rs 4.07 lakh
  • Andhra Pradesh- Rs 4.12 lakh
  • Assam- Rs 5.03 lakh
  • Odisha- Rs 2.81 lakh
State-wise average asset value for urban households
  • Maharashtra- Rs 43.37 lakh
  • Kerala- Rs 40.24 lakh
  • Haryana- Rs 36.78 lakh
  • Odisha- Rs 7.87 lakh
  • Jharkhand- Rs 9.73l akh
  • Andhra Pradesh- Rs 9.91 lakh 


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