The Causes for Rural Indebtedness:
1. Poverty of Farmers:
- The vicious circle of poverty forces the farmers to borrow for consumption and cultivation.
- Thus poverty, debt and high rates of interest hold the farmer in the grip of money lenders.
2. Failure of Monsoon:
- Frequent failure of monsoon is a curse to the farmers and they have to suffer due to the failure of nature.
- Farmers find it difficult to identify good years to repay their debts.
3. Litigation:
- Due to land disputes litigation in the court compels them to borrow heavily.
- Being uneducated and ignorant they are caught in the litigation process and dry away their savings and resources.
4. Money Lenders and High Rate of Interest:
- The rate of interest charged by the local money lenders is very high and the compounding of interest leads to perpetuate indebtedness of the farmer.
