ABSTRACT
The agrarian crisis of Punjab economy is multidimensional and has been deepening progressively. Marginalization of agriculture and slowdown of industrial growth has been attributed to the economic crisis of Punjab, especially agrarian crisis. Un-remunerative prices of farm products, low and stagnated yields, fall in net farm incomes, successive crop failure and high and increasing costs of cultivation have landed the small and marginal farmers in a debt trap and suicides (Bhangoo 2005; Punjab State Farmers’ Commission 2006). Punjab farmers are driven to a debt trap not only because of imprudent borrowing from high-cost informal sources and for unproductive purposes but also because of the fall in net farm incomes. Punjab farmers have also borrowed heavily for farm machinery, for digging/deepening and replacing old bore wells with submersible pumps and for cultivating input-intensive high-value crops (Singh, Kaur and Kingra 2008). Unproductive nature and use of loans, exorbitant interest rates and indebtedness towards informal sources are disturbing dimensions of indebtedness. Punjab agriculture seems to be no longer a viable and profi table/ rewarding occupation. Earnings from crop cultivation are not enough to meet the annual cultivation expenditure in most of the states, including Punjab, since this leads to farmers’ indebtedness (NSSO 2005). Indebtedness depends on availability of credit, cost of credit, ability to service it and cost of cultivation. Unproductive use of loans along with exorbitant interest rates and indebtedness towards moneylenders/commission agents are disturbing dimensions of indebtedness clearly identifi ed by Shergill (1998, 2010) and NSSO (2005). The gravity of indebtedness is deepening in Punjab as it increased from Rs 5,700.91 crores in 1997 (Shergill 1998) to Rs 12,506.37 crores in 2002 (Satish 2006) to Rs 24,000
crores (Punjab State Farmers’ Commission 2007) and further to Rs 35,000 crores in 2011.
