Rural Indebtedness and Farm and Non-farm Credit

The present paper attempts to analyse the extent of household indebtedness and utilisation pattern of credit in rural Punjab. In this context, unit level records of the nationally represented secondary data from the key indicators of all India Debt and Investment Survey of Rural Household in India (Punjab) has been used; that is being extracted and scrutinized from 70th round of National Sample Survey Office. The results of the study indicate that the informal mechanism of credit delivery is playing an important role for meeting their credit requirements in the State. It's also noteworthy that either the debt is provided by the institutional or noninstitutional credit agencies, the crucial aspect of increasing indebtedness in rural area is mainly concerned with its lane of purposee. On the basis of foregoing analysis it is to be suggested that the credit supervisory mechanism of the financial institutions should be strengthened to tackle the problems of rural indebtedness.