प रव रक प रस प य और द नद रय. Household Assets and Liabilities

Transcription

1 रप ट स./ Report No. 570 (70/18.2/1) प रव रक प रस प य और द नद रय Household Assets and Liabilities एन. एस. एस. 70व द र NSS 70 th Round (जनवर दस बर 2013) (January December 2013) भ रत सरक र Government of India स क और क य म क य यन म लय Ministry of Statistics and Programme Implementation र य तदश सव ण क य लय National Sample Survey Office

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3 Preface The All-India Debt and Investment Surveys (AIDIS) of the National Sample Survey (NSS) are the primary source of data on various indicators of stock of s, incidence of indebtedness, capital formation and other indicators of rural/urban economy. These are used for planning, policy formulation and decision support and as input for further analytical studies by various Government organizations, academicians, researchers and scholars. National Sample Survey Office (NSSO) undertook All-India Debt and Investment Survey (AIDIS) in its 26 th round (July 1971-June 1972), 37 th round (January-December 1982), 48 th round (January-December 1992) and 59 tl1 round (January-December 2003) prior to the present 70 th round' survey carried out during January-December In the present AIDIS, information on the s and liabilities of the households was collected as on 30 th June Most of the State Governments also participated in this survey on a matching sample basis. Besides information on s and liabilities, the information was also collected on the amount of capital expenditure incurred by the households during the Agricultural Year under different heads, like residential buildings, farm business and non-farm business. Based on the Central Sample data collected by NSSO in this round of AIDIS, the Key Indicators of Debt and Investment in India, giving the important indicators of s and indebtedness of Indian households and the unit level data were released in December The present report Household Assets and Liabilities is the first in the series of four reports. This report contains three chapters and three appendices. Chapter One gives an introduction to the report and Chapter Two describes the basic concepts and definitions used for the survey. Chapter Three discusses the main findings on household s and liabilities obtained from the survey data. The Survey Design and Research Division (SDRD) undertook the development of survey instruments and the preparation of this document. Field work of the survey was carried out by the Field Operations Division (FOD) in respect of central sample. The data processing and tabulation work was done by the Data Processing Division (DPD). The Coordination and Publication Division (CPD) coordinated various activities pertaining to the survey. I am grateful to the Chairman and Members of the Working Group for NSS 70 th round and National Statistical Commission (NSC) for providing their valuable guidance at various stages of the survey. I would also like to appreciate efforts made by the officers of the different Divisions ofnsso involved in preparation of this document. I am sure that the report will be useful to planners, policy makers, academicians and researchers. Suggestions for improvement in content, layout and other aspects of this document will be highly appreciated. New Delhi January, 2016 (Samiran Mick) Director General & Chief Executive Officer National Sample Survey Office

4 CONTENTS Chapter One Introduction 1.1 The Report in Perspective Background Comparability with Previous Round Survey Reports of the 70 th Round AIDIS Contents of this Document Schedules of Enquiry Scope and Coverage Conceptual Framework 6 Chapter Two Concepts and Definitions 2.1 Basic Concepts 8 Chapter Three Summary of Findings 3.0 Introduction Indicators at a glance: -India level Assets and liabilities Average Asset Holdings in Different Household Types Average Asset Holdings across Decile Classes of Households Inter-State Comparison of Average Value of Assets Changes in Ratio of Average Value of Assets (AVA) of State to Corresponding AVA at -India level 3.6 Composition of Household Asset Holdings Possession of Land by Decile Class of Household Asset Holdings Incidence of Indebtedness (IOI) and Average Amount of Debt (AOD) IOI and AOD across Asset Holding Classes Temporal Changes in Household Indebtedness IOI and AOD across States Temporal Changes in IOI in Selected States Debt-Asset ratio (DAR) Temporal Changes in Debt-Asset Ratio Financial Inclusion of households and Owning of Bullion and Ornaments Inequality in Distribution of Assets: -India and States 43 22

5 Contents Appendix A Detailed Tables A-1 A-273 Appendix B Note on Sample Design and Estimation Procedure B-1 B-10 Appendix C Schedule 18.2 Visit 1 & Visit 2 C-1 C-22 List of Graphs Fig 3.1 Fig 3.2 Fig. 3.3 Fig. 3.4 Deciles of the All-India Rural and Urban Distributions of Households by Asset: rural, urban Average Value of Assets (in lakh) as on in 18 selected States: rural, urban Percentage Share of Different Components of Assets in the Total Value of Assets: rural, urban Incidence of Indebtedness (IOI) and Average Debt Per Household (AOD) by Asset Holding Class in India: rural, urban Fig 3.5R/U Debt-Asset Ratio for the Selected States in 1991, 2002 and 2012: rural, urban 36 Fig. 3.6 Fig 3.7R/U Lorenz Curves for Assets held, for Rural and Urban Areas as on : rural, urban Scatter plot between Gini s coefficient and RSAI(AVA) for selected states 39 40

6 Contents iii Appendix A Detailed Tables Table 1R/U AVA, AOD, IOI and Debt-Asset ratio for rural India for each State/UT, major household types [-India & State/UTs] Table 2R/U Per 1000 number of households, average value of s per household and amount of cash loan per household as on by and sex of head of household Table 3R/U [-India & State/UTs] Per 1000 number of households, average value of s per household and amount of cash loan per household as on by household holding class Table 4R/U [-India & State/UTs] Per 1000 distribution of rural households by household holding class for each [-India & State/UTs] Table 5R/U Per 1000 rupees break-up of total s of rural households by household holding class for each [-India & State/UTs] Table 6R/U Per 1000 number of households reporting s of specified categories and cash loan outstanding as on by household holding class [-India & State/UTs] Table 7R/U Average value of s of specified categories and cash loan outstanding as on by household holding class [-India & State/UTs] Table 8R/U Per 1000 number of households reporting having bullion & ornaments and average amount of bullion & ornaments per household for each major [-India & State/UTs] Table 9R/U Proportion of households reporting rural and urban land, average area of rural and urban land, and average value of rural and urban land per household in each household holding class [-India & State/UTs] Table 10a-R/U Proportion of households having (i) bank account (ii) made/received payments through bank but not having any bank account (iii) P.O. account (iv) other deposit account and (v) Kisan Credit Card, proportion of households having received remittance during last 365 days, and amount of credit (Rs.) receive d from Kisan Credit Card per household having KCC [-India & State/UTs] Table 10b-R/U Proportion of households having (i) bank account ( ii) made/received payments through bank but not having any bank account (iii) P.O. account (iv) other deposit account and (v) Kisan Credit Card, proportion of households having received remittance during last 365 days, and amount of credit (Rs.) received from Kisan Credit Card per household having KCC by decile classes [-India] A-1 A-4 A-5 A-20 A-21 A-46 A-47 A-69 A-70 A-92 A-93 A-166 A-167 A-240 A-241 A-242 A-243 A-268 A-269 A-270 A-271 Draft NSS Report No. 570: Household Assets and Liabilities in India

7 Contents Detailed Tables Table 11 Per 1000 distribution of informants by nature of response for each gender, for each age group, and for each category of relationship to head of household [-India & Visit I] Table 12 A- 272 Gini s coefficient of State-level distribution and AVA (Rs.) [-India & State/UTs] A- 273

8 Abbreviations Abbreviation AVA AOD IOI AODL DAR BO hh (s) RSAI indicator Description Average Value of Assets Average Amount of Debt per household Incidence of Indebtedness Average Amount of Debt per indebted household Debt-Asset ratio Bullion and Ornaments Household (s) Ratio of indicator at State to All-India

9

10 Chapter One Introduction 1.1 The Report in Perspective The National Sample Survey Office (NSSO) conducts nationwide socio-economic surveys as part of its rounds, each round normy of a year s duration. The NSS surveys are conducted through household interviews on a random sample of households selected through a scientific design and cover practicy the entire geographical area of the country The All-India Debt and Investment Survey (AIDIS) is genery conducted as one of the main enquiries of an NSS round at decenial intervals. This provides a series of AIDIS s. The present report provides the results of AIDIS which was carried out as a part of the 70 th round survey of NSSO during January to December This was the seventh such survey conducted at the -India level. The present report is the first in the series of four reports of this AIDIS The main objective of the AIDIS is to generate reliable estimates on s, liabilities and capital expenditure of the household sector. At present, the decenniy conducted AIDIS is the only nation-wide enquiry providing data on these aspects of Indian households (s, indebtedness and capital expenditure). In the 70 th round, information on s and liabilities of the households as on , amount of capital expenditure incurred by the household during the agricultural year (July 2012 June 2013), cash borrowings and repayments made by the household, sale and loss of s of the household during the agricultural year was collected through the Debt and Investment Schedule (Schedule 18.2). The present report contains the survey results of the 70 th round on value and composition of the household s as also extent of indebtedness and amount of cash loans as on 30 th June Background The Reserve Bank of India (RBI) conducted the All India Rural Credit Survey, for the first time during November 1951 to August 1952, in 75 selected districts spread over the country. The main objective of this survey was to study two aspects, namely, (i) the demand for credit from rural families and (ii) the supply of credit by credit agencies both institutional and non-institutional. The data were collected mainly for formulating the banking policies. Information on s, economic activities, particulars of credit operations and the incidence of indebtedness in the rural India was collected in the survey to assess the

11 Chapter One P a g e 2 demand for rural credit. Further, data on the extent and mode of operations of different credit agencies were collected to examine the supply side of credit The first Rural Credit Survey was followed by a similar survey in by the RBI. The scope of the survey was extended to include capital expenditure in the household sector and other associated indicators of the rural economy. The second survey thus came to be known as the "All-India Rural Debt and Investment Survey" The responsibility of conducting the third such survey was given to NSSO, the then National Sample Survey Organisation. This organisation undertook the All-India Debt and Investment Survey (AIDIS) covering both rural and urban areas, in its 26 th round ( 71-72), 37 th round ( 81-82), 48 th round ( 92) and 59 th round ( 03), prior to the 70 th round ( 13). The objectives of the AIDIS remain the same as those of the earlier surveys, namely, to obtain quantitative information on the stock of s, incidence of indebtedness, capital formation and other indicators for the rural/urban economy which will be of value in developing the credit structure in particular, and also to obtain other ied information required in the field of planning and development. Since the survey was in the nature of a repeat survey of the 59 th round, it was considered necessary to plan the survey in such a way as to ensure comparability of some estimates with those of earlier rounds as far as practicable. 1.3 Comparability with previous round survey After a critical review of the concepts and definitions followed in the AIDIS of NSS 59 th Round with respect to the changed scenario of the country, some changes were made in the procedure of valuation of s for the 70 th Round: a. Values of land & building as on were recorded in the 70 th round as per their normative/guideline values, whereas in the 59 th round they were recorded as reported by the informant. b. The value of the shares and debentures owned on the date of survey was evaluated as per the market price prevailing on the date of survey, if the said shares/debentures had been purchased before the reference date, i.e On the other hand, if the shares, etc., were acquired during the reference period, then the purchase/sale price was recorded under acquisition or under disposal, as the case might be. If they had been acquired during the reference period by ways other than purchase, then the market price prevailing on the date of survey was recorded. In cases where it was not possible to ascertain the prevailing market price of a share, the paid-up value of the shares (if acquired other than by way of purchase) or the value paid by the household (if they had been purchased) was recorded. c. In case of certificates, annuity schemes, the amount paid at the time of purchase was recorded. In case of deposits, the face value was recorded. In case of insurance premium, total of the premium paid up to the reference date was considered. Moreover, for contributions to provident fund, etc., total contribution plus interest earned was recorded. In case of Unit Linked Insurance plans (ULIP), the valuation NSS Report No.570: Household Assets and Liabilities in India

12 P a g e 3 Introduction was obtained as product of number of units and net value (NAV) of the unit. In previous round, however, value of financial s on the date of survey and disposal and acquisition during reference date to date of survey had been recorded, and finy value as on reference date had been derived In the 70 th round, unlike the previous round, direct question on the value of excluding shares/debentures etc., as on was asked. In 59 th round data as on reference date was derived from the data as on the date of survey and the data on transactions during the reference date to the date of survey Household durables were not considered as s in this round (as valuation of durable goods as on any date is difficult to obtain; and some information regarding durable s are available from Household Consumer Expenditure Survey) Bullion and ornaments were collected but kept outside the purview of s. (In the 59 th round household durables including bullion and ornaments were part of ) Assets and liabilities of household enterprises were recorded only if the enterprise was fully owned by the household, and not a partnership involving members of different households The estimates on s and liabilities for Telangana are available for the first time from the 70 th round survey. It may be noted that, estimates shown for the state of Andhra Pradesh relate to the newly formed state of that name. However, for the earlier rounds, estimates shown for Andhra Pradesh correspond to the erstwhile state boundaries that existed before the new state was carved out Due to the change in coverage and difference in concepts and definitions followed in the two rounds in respect of some important parameters, the results of AIDIS 2013 (NSS 70 th round) are not strictly comparable with the results of AIDIS 2003 (NSS 59 th round). While making any comparison of results of AIDIS 2013 with those of AIDIS 2003, these differences should be taken into consideration. 1.4 Reports of the 70 th round AIDIS The results of the NSS 70 th round survey on debt and investment are planned for release in four reports based on comprehensive tabulation of subject parameters and indicators in various cross-classifications generated from the central sample data 1. The titles of these reports are: 1 Household Assets and Liabilities in India (as on ) 2 Household Indebtedness in India (as on ) 3 Household Asset Holding and Indebtedness of Social Groups in India (as on ) 4 Household Capital Expenditure in India during to See paragraph NSS Report No.570: Household Assets and Liabilities in India

13 Chapter One P a g e Contents of this document This report contains three chapters and three appendices. The present chapter, Chapter One gives an introduction to the report, and Chapter Two describes the basic concepts and definitions used for the survey. Chapter 3 discusses the main findings on household s and liabilities obtained from the survey data. Appendix A of the report contains tables providing estimates of various items of s and liabilities for states. Appendix B gives details of the sample design and estimation procedure followed and Appendix C consists of the schedules of enquiry (Schedule 18.2, visit 1 and visit 2) that were canvassed in the surveyed households Chapter Three summarises the major findings of the survey and discusses the salient features relating to s and cash liabilities of the households as on The observations are mainly confined to -India estimates and are followed by an examination of the disparities in ownership of s and incidence of indebtedness across selected states and their rural-urban sectors. The estimates for the smer States and Union Territories (UTs) have not been presented separately as the sample sizes for the smer states and UTs may not be adequate for getting estimates of desired accuracy at least for measuring change or interstate difference. The estimates for those states and UTs are presented in the Appendix A. Information on kind loan (collected as on date of survey) is not analysed in this report Appendix A of the report contains tables providing estimates of various items of s as also of the total s and liabilities of the households as on at the state and -India level separately for rural and urban areas. As such, for this report, liabilities denote cash loans outstanding as on , which is hereafter referred to, in brief, as debts of households. The term indebted households also stands for the same All the estimates presented in this report are based on the central sample data only and also based on combined estimate of the two sub-samples. It would be worthwhile to mention here that the cell figures in any of these detailed tables, when added up, may not exactly equal the figure shown against the 'total' column (or line) due to (i) rounding off and/or (ii) the presence of non-response cases The indicators presented in this report are Assets Indebtedness (i) Average value of of household by decile class of household s, by selected states; share of components of s in the total value of s for for households, ratio of household s of states to India (RSAI AVA ), for decile class of household s, by selected states, (ii) Incidence of Indebtedness and Average Amount of Debt of household, for decile class of household s, by selected states, change in household indebtedness Debt-Asset (v) Debt-Asset ratio for decile class of household s, selected states, ratio change in Debt Ratio, ratio of debt to financial s Financial inclusion and Owning bullion and ornaments Inequality in distribution NSS Report No.570: Household Assets and Liabilities in India

14 P a g e 5 Introduction 1.6 Schedules of enquiry The survey period of the 70 th round was from January to December The required information was collected from a set of sample households through two visits to each household (see Appendix C for detailed schedule). On considerations of operational necessity, the survey period of the first visit was fixed as seven months from January to July 2013 and the survey period of the second visit of five months duration from August to December In each visit, the liability position of the household was ascertained with reference to a fixed reference date which was the same for sample households, viz., the 30 th of June, 2012 for the first visit and the 30 th of June, 2013 in the second visit. The s position of the household on the other hand, was ascertained only in the first visit, with reference to a fixed reference date, viz., the 30 th of June, Broadly, the following information was collected in this round from each household: 1. the s (owned) of the household as on 30 th June 2012, classified into (a) physical s and (b) financial s 2. the liabilities of the household as on 30 th June 2012 in visit 1 and as on 30 th June 2013 in visit 2 3. the amount of capital expenditure incurred ( on transactions) by the household during July June 2013 on (a) residential plots, houses or buildings, (b) farm business and (c) non-farm business. 1.7 Scope and coverage Geographical coverage: This survey covered the whole of the Indian Union Population coverage: The following rules were adhered to determine population coverage: 1. Floating population, i.e., persons without any normal residence, was excluded. But persons residing in open space, roadside shelter, under a bridge, etc., more or less regularly in the same place were covered. 2. Foreign nationals were excluded, as well as their domestic servants, if by definition the latter belonged to the foreign national's household (see Chapter 2 for definition of household). 3. Persons residing in barracks of military and paramilitary forces (like police, BSF etc.) were kept outside the survey coverage. However, the civilian population residing in their neighbourhood, including the family quarters of service personnel, was covered. 4. Orphanages, rescue homes, ashrams and vagrant houses were outside the survey coverage. However, the persons staying in old age homes, the students staying in ashram/hostels and the residential staff (other than monks/nuns) of these ashrams NSS Report No.570: Household Assets and Liabilities in India

15 Chapter One P a g e 6 were covered. Although orphans living in orphanages were excluded, the persons looking after them and staying there were covered. Convicted prisoners undergoing sentence were outside the coverage of the survey. 1.8 Conceptual framework Reference period: All the estimates of s and liabilities presented in this report are for a fixed reference date, viz These are entirely based on the data collected during the first visit from the sample households. The position of s (except shares and debentures) and liabilities of sample households as on was obtained directly from the informant unlike in the previous round where it had been derived from the data on the date of survey and the data on transactions during the period from the reference date to the date of survey The estimates of number of households presented in this report are based on data with a moving reference point, from to , which spans a period of seven months. These estimates, therefore, may be taken to represent the number of households existing as on , the mid-point of the seven-month period. The estimates for s and liabilities for the 70 th round are obtained as on and the average value of s and liabilities are obtained by considering the number of households obtained from Visit I data. For this report only Visit I data were used The important classificatory characters used for tabulation are /major and household holding class In the 70 th round, unlike the previous round, direct question were asked to ascertain the value of s as on excluding the case of shares/debentures etc.. In case of indebtedness of the household, it was felt in this round that items like (i) interest accrued during a particular period of time (ii) interest outstanding as on date of survey are difficult to report, and hence the following items were recorded inclusive of interest in both Visit 1 and Visit 2. a. amount repaid during a particular period b. amount written off during a particular period c. amount outstanding of the total loan amount as on date of survey Sample design A stratified multi-stage design was adopted for the 70th round survey. The first stage units (FSU) were the census villages (Panchayat wards in case of Kerala) in the rural sector and Urban Frame Survey (UFS) blocks in the urban sector. The ultimate stage units (USU) were households in both the sectors. In case of large FSUs, one intermediate stage of sampling was the selection of two hamlet-groups (hgs)/sub -blocks (sbs) from each rural/ urban FSU For the rural sector, the list of 2001 census villages updated by excluding the villages urbanised and including the towns de-urbanised after 2001 census (henceforth the NSS Report No.570: Household Assets and Liabilities in India

16 P a g e 7 Introduction term village would mean Panchayat wards for Kerala) constituted the sampling frame. For the urban sector, the latest updated list of UFS blocks ( ) was considered as the sampling frame. Table.T1: Number of villages/blocks surveyed and number of households surveyed for Schedule 18.2 Visit 1 and 2: NSS 70 th round, Central sample State/UT no. of fsu s (villages/blocks) surveyed no. of sample households Visit 1 Visit 2 rural urban rural urban rural+urban rural urban rural+urban (1) (2) (3) (4) (5) (6) (7) (8) (9) Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Odisha Punjab Rajasthan Sikkim Tamil Nadu Telangana Tripura Uttarakhand Uttar Pradesh West Bengal A & N Islands Chandigarh Dadra & N. Haveli Daman & Diu Lakshadweep Puducherry India NSS Report No.570: Household Assets and Liabilities in India

17 Chapter One P a g e Sample size First-stage units: For rural India, the number of villages surveyed in the Central sample (surveyed by NSSO) was 4,529 and the number of urban blocks surveyed was 3,507. This document is based on the estimates obtained from the Central sample only Second-stage units: Stratification of households was done on the basis of indebtedness (to institutional agencies or non- institutional agencies or neither) of a particular household. For the AIDIS, from each sample village and urban block, 14 households were surveyed. The sampling design and estimation procedure is presented in detail in Appendix B of this document. The total number of households in which Schedule 18.2 was canvassed, was 62,135 in rural India and 48,665 in urban India in Visit 1 and 61,650 in rural India and 46,771 in urban India in Visit Table T1 above shows the numbers of villages and urban blocks surveyed, and also the numbers of rural and urban sample households in each visit, for each State and Union Territory. Number of households surveyed in visit 2 is lower than those surveyed in visit 1 for many States/UT as some of the households could not be surveyed in visit 2 due to some reason or other. NSS Report No.570: Household Assets and Liabilities in India

18 Chapter Two Concepts & Definitions 2.1 Basic Concepts Household: A group of person normy living together and taking food from a common kitchen constitutes a household. The word "normy" means that temporary visitors are excluded but temporary stay-aways are included. Thus, a son or daughter residing in a hostel for studies is excluded from the household of his/her parents, but a resident employee or resident domestic servant or paying guest (but not just a tenant in the house) is included in the employer/host's household. "Living together" is usuy given more importance than "sharing food from a common kitchen" in drawing the boundaries of a household in case the two criteria are in conflict; however, in the special case of a person taking food with his family but sleeping elsewhere (say, in a shop or a different house) due to space shortage, the household formed by such a person's family members is taken to include that person also. Each inmate of a mess, hotel, boarding and lodging house, hostel, etc., is considered as a single-member household except that a family living in a hotel (say) is considered as on e household only; the same applies to residential staff of such establishments. Under-trial prisoners in jails and indoor patients of hospitals, nursing homes, etc., are considered as members of the households to which they last belonged Household size: The size of a household is the total number of persons in the household Household Type: The, based on the means of livelihood of a household, was decided on the basis of the sources of the household's income during the 365 days preceding the date of survey. For this purpose, only the household's income (net income and not gross income) from economic activities was considered; but the incomes of servants and paying guests were not taken into account. types: In rural areas, a household will belong to any one of the following six household self-employed in agriculture self-employed in non-agriculture regular wage/salary earning casual labour in agriculture casual labour in non-agriculture Others a) Self-employed in agriculture/non-agriculture: Persons who operate their own farm or non-farm enterprises or are engaged independently in a profession or trade on own- NSS Report No.570: Household Assets and Liabilities in India

19 Chapter Two Page 10 account or with one or a few partners are deemed to be self-employed in household enterprises. The essential feature of the self-employed is that they have autonomy (i.e., how, where and when to produce) and economic independence (i.e., market, scale of operation and money) for carrying out their operation. The remuneration of the self-employed consists of a non-separable combination of two parts: a reward for their labour and profit of their enterprise. The combined remuneration is given by the revenue from sale of output produced by self-employed persons minus the cost of purchased inputs in production. b) Regular wage/salaried household: Persons working in farm or non-farm enterprises not ran by their own households and, in return, got salary or wages on a regular basis (i.e. not on daily basis or on periodic renewal of work contract) were treated as regular salaried/wage employees. An urban household reported that its major source of income during the 365 days preceding the date of survey was regular wage/salaried employment of members were treated as a 'regular wage/ salaried' households. c) Casual labour household in agriculture/non-agriculture: Persons working in farm or non-farm enterprises not ran by their own households and, in return, got wages under terms of daily or periodic work contract were treated as casual wage labourers. An urban household reported that major source of its income during the 365 days preceding the date of survey was casual wage employment of members was treated as a 'casual labour' household. d) Others: All households not fing in any of these above were considered as Others Occupational classification of rural households: The rural households were initiy classified into two types, namely, cultivator and non-cultivator households. (i) (ii) Cultivator households: All rural households operating at least hectare of land during the 365 days preceding the date of survey were treated as 'cultivator households'. Non-cultivator households: All rural households operating no land or land less than hectare were considered to be non-cultivator households Household type of urban households: In urban areas, each household was first categorised in one of the four groups self-employed, regular wage/ salaried employee, casual labour and 'others' as per the definitions given below : (i) self-employed regular wage/salary earning casual labour others Self-employed: Persons engaged in the farm or non-farm enterprises of their households were ced self-employed workers. In urban areas, a household was NSS Report No.570: Household Assets and Liabilities in India

20 Page 11 Concepts & Definitions considered self-employed, if the major source of its income during the 365 days preceding the date of survey was self-employment of its members. (ii) Other urban household: All the remaining urban households were treated as 'other' households Major Occupational type: The term refers to cultivator and non-cultivator (i.e. other than cultivator) households for the rural areas. For the urban areas, self-employed and other households are the two major s Household s: Household s represented that were owned by the household and had money value. This included physical s like land, buildings, livestock, agricultural machinery and implements, non-farm business equipment, transport equipment, and financial s like dues receivable on loans advanced in cash or in kind, shares in companies and cooperative societies, banks, etc., national saving certificates and the like, deposits in companies, banks, post offices and with individuals. The AIDIS does not include crops standing in the fields and stock of commodities held by the household in the household s Liabilities: All claims against a household held by others were considered liabilities of the household. Thus loans payable by the household to others, irrespective of whether they were cash loans or kind loans were deemed as liabilities of the households. Unpaid bills of grocers, doctors, lawyers, etc., were also considered liabilities of the household. Different kinds of liabilities are defined below. (i) (ii) Cash loans: All loans taken in cash were considered to be cash loans, irrespective of whether those loans were repaid or proposed to be repaid in cash or in kind. Cash loans, genery, covered borrowings at specific rates of interest for specific periods of time. However, if a loan was taken even at nil rate of interest from relatives and friends, it was considered to be a cash loan. The loans may be taken against a security or without any security. Dues payable by the household owing to purchase of goods under a hire-purchase scheme were treated as cash loans. Kind loans: All loans taken in kind (except the cases of hire-purchase) irrespective of whether those were already repaid or yet to be repaid in cash or in kind were considered to be kind loans payable. Assessment of the value of land: In this survey, value of land acquired prior to 30th June 2012 by the household through inheritance or otherwise was recorded on normative basis. Normative/guideline values of land (as on ) were recorded in consultation with Patwaris (or equivalent) in the rural areas and the Registrar s office in the urban areas. For specific notional guidelines on valuation of Land outside the village, the value reported by the household was taken as the deemed notional value for practical purposes. NSS Report No.570: Household Assets and Liabilities in India

21 Chapter Two Page Valuation of s In the first visit, information was collected on s (owned) and liabilities as on 30 th June The basis for valuation of s is detailed below. However, for the purpose of estimation of capital formation, actual expenses incurred on transactions during the reference period (i.e. between and ) were recorded separately and were collected in both visits. The following points may be noted: a. Values of land & building as on were reported as per their normative/guideline values. The local FOD officials consulted Patwaris (or equivalent) in the rural areas and the Registrar s office in the urban areas to obtain them. b. In case of inability of respondents to report the value as on of other physical s like livestock, agricultural implements, non-farm equipment and transport equipment, knowledgeable local persons were contacted to assess these values. c. Assets and liabilities of household enterprises were recorded only if the enterprise was fully owned by the household, and not a partnership involving members of different households. d. The value of the shares and debentures owned on the date of survey were evaluated as per the market price prevailing on the date of survey, if the said shares/debentures were acquired before the reference date, i.e On the other hand, if the shares, etc. were acquired during the reference period by way of purchase, then the purchase price was recorded under acquisition or under disposal, as the case may be. If they were acquired during the reference period by ways other than purchase, then the market price prevailing on the date of survey was recorded. In cases where it was not possible to ascertain the prevailing market price of a share, the paid-up value of the shares (if acquired other than by way of purchase) or the value paid by the household (if they are purchased) was recorded. e. In case of certificates, annuity schemes, the amount paid at the time of purchase was entered. In case of deposits, the face value was entered. In case of insurance premium, total of the premium paid upto reference date was considered. Moreover, for contributions to provident fund, etc., total contribution plus interest earned was entered. In case of Unit Linked Insurance plans (ULIP), the valuation was obtained as product of number of units and net value (NAV) of the unit Farm business: Farm business comprised household economic activities like cultivation, including cultivation of plantation and orchard crops, and processing of produce on the farm, e.g. paddy hulling and gur making. Although gur making is a manufacturing activity, this was covered under farm business only when such activity was carried out in the farm by indigenous method. Farm business also included activities ancillary to agriculture, like livestock raising, poultry, fishing, dairy farm activities, bee keeping and other ied NSS Report No.570: Household Assets and Liabilities in India

22 Page 13 Concepts & Definitions activities coming under Tabulation Categories A and Classification B of the National Industrial Non-farm business: Non-farm business was defined as household economic activities other than those covered in the farm business. This cover manufacturing, mining & quarrying, trade, hotel & restaurant, transport, construction, repairing and other services. For the purpose of this survey, non-farm business were excluded when such activities were carried out in non-household enterprises. Non-farm business enterprises, which were registered under section 2m(i) or 2m(ii) and section 85 of Factories Act, 1948 and Bidi and Cigar manufacturing establishments registered under Bidi and Cigar Workers (condition of employment) Act, 1966 were kept outside the coverage of the survey Enterprise: An enterprise was defined as an undertaking which was engaged in the production and/or distribution of some goods and/or services meant mainly for the purpose of sale, whether fully or partly. An enterprise may be owned and operated by a single household or by several households jointly, or by an institutional body Household enterprise: A household enterprise was defined as one which was run by one or more members of a household or run jointly by two or more households on partnership basis irrespective of whether the enterprise was located in the premises of the household(s) or not. In other words, proprietary and partnership enterprises were household enterprises Non-household enterprise: Non-household enterprises were defined as those which were institutional, i.e., owned and run by the public sector (Central or State Government, local governments, government undertakings, etc.), corporate sector, co-operative societies, other types of societies, institutions, associations, trusts, etc Non-agricultural enterprises: All the enterprises covered under NIC-2008, 2 digit codes 05 to 99 were considered as non-agricultural enterprises Household holding class: This refers to the 10 decile classes of the Rural/Urban ALL-INDIA distribution (estimated distribution) of HOUSEHOLDS by holding size. In the tables, the different decile classes are referred to simply as 1 (lowest decile class), 2, 3, 9, 10. Thus, for example, the words decile class 2 (or 10-20% ) in a table for the State PUNJAB, RURAL sector, means households of the rural Punjab fing in the second (second lowest) decile class of the estimated ALL-INDIA distribution of RURAL households by holding size. The 10 household holding classes were demarcated separately for each sector based on visit 1 data by examining the distribution of sample households over the holding classes for -India after data on visit 1 schedules were entered and validated. NSS Report No.570: Household Assets and Liabilities in India

23 Chapter Two Page Gini s Coefficient: This is a measure of inequality of a distribution. It is defined as a ratio of the area between the Lorenz curve of the distribution and the line of equality; and the area under the line of equality. The Gini coefficient, should lie between 0 to 1 and is often used as a measure of income inequality. Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) and 1 corresponds to perfect income inequality (i.e. one person has the income, while everyone else has zero income). The Gini coefficient can also be used to measure wealth inequality. Calculation of Gini s Coefficient: Let X be a non-negative random variable with probability density function f (x) and distribution function F (x). F( x) P[ X x] x 0 f ( x) dx 0 E( X ) xf ( x) dx Let x 1 x) yf ( y) dy xf ( x) F ( dx 0 0 x 0 = yf ( y) dy Then as x increases from 0 to, F(x) and F 1(x) increase from 0 to 1. The relationship between F and F 1 gives the equation of the Lorenz curve, where F 1=F 1(F). NSS Report No.570: Household Assets and Liabilities in India

24 Chapter Three Summary of Findings 3.0 Introduction This chapter summarises the major findings of the survey and discusses the salient features relating to s and cash liabilities of the households as on 30 th June, In India, Debt and Investment Surveys of NSSO, often ced -India Debt and Investment Survey (AIDISs), are the principal sources of data on s, liabilities and capital expenditure of the household sector. As mentioned earlier, this survey is done once in ten years by NSSO. The present report pertains to the results obtained from the seventh AIDIS conducted by the NSSO in its 70 th round during January December, The report contains the results on value and composition of household along with the extent of indebtedness of the households and amount of debt per household as on 30th June, The observations summarised in this chapter are mainly confined to -India estimates followed by an examinationn of the disparities in ownership of ss and incidence of indebtedness across the selected states and its rural-urban sectors. The estimates for the smer States and Union Territories (UTs) have not been presented separately. The reason is that the sample sizes for the smer states and UTs may not be adequate for getting a sufficiently reliable estimate at least for measuring change or inter-state comparison. The estimates for those states and UTs have, however, been given in the Appendix (Appendix A). The discussion starts with observation of the s (average value of ) of the households for the different s. The variations in household holdings over various correlates like decile class of holding also have been discussed. Composition of different household holdings, as well as possession of rural and urban land by the households has been taken up for discussion. Discussion on household indebtedness, amount of debt per household in terms of cash dues for decile class of holding and debt- ratio of the households as on have been taken up subsequently and finy the chapter concludes with a discussion on inequality in distribution of s To have an idea of the change of household holdings and indebtedness over the years since 1991, the results of the earlier surveys of the NSSO on Debt and Investment, viz. 48 th (1991) and 59 th (2002) rounds are also presented in this report. The estimates for s and liabilities for the 48 th and 59 th round were obtained as on , respectively, and the corresponding estimates for the 70 th round have been obtained as on In the 70 th round, estimates for the number of households have been obtained from the data of first visit (collected during January July, 2013) only, and therefore, the NSS Report No.570: Household Assets and Liabilities in India

25 Page 16 Summary of Findings estimates refer to the mid-point of the survey period of Visit 1, i.e But to indicate a uniform reference period for the estimates of a round, in the summary tables of this chapter, the reference periods for the 48 th, 59 th and 70 th rounds are stated as 1991,2002and 2012 respectively For the purpose of report, the selectedstates (which are relatively large in terms of population) are: Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal. However, the estimates for -India presented in the statement tables of this chapter as well as other tables of the report are based on the data of the states and union territories The states of Chhattisgarh, Jharkhand,Uttarakhandand Telangana have emerged in the recent past out of the partition of erstwhile Madhya Pradesh, Bihar and Uttar Pradesh, and Andhra Pradesh respectively. The estimates on s and liabilities for Chhattisgarh, Jharkhand and Uttarakhand are available for the first time from the 59 th round survey and for Telangana from the 70 th round survey. Therefore, while presenting comparable figures with the earlier rounds at the state level, figures for these new states are shown as -. It may be noted that for the earlier rounds, estimates shown for the states of Madhya Pradesh, Bihar and Uttar Pradesh and Andhra Pradesh correspond to the erstwhile state boundaries that existed before the new states were carved out. 3.1 Indicators at a glance: -India level Assets and liabilities Information on both physical and financial s owned by the households as on was collected in the 70 th round survey on Debt and Investment along with outstanding amount of indebtedness of indebted households. Proportion of households owning some as well as proportion of household reporting indebtedness can be directly arrived at from this survey. Moreover, some basic indicators such as(i) average value of s (AVA), (ii) average amount of debt (AOD), (iii) incidence of indebtedness and (iv) debt ratio (DAR) at -India level, which were attained from this survey are shown in the statement 3.1 separately for rural and urban sector. Assets like land, buildings, livestock, agricultural implements & machinery, non-farm business equipment, transport equipment were considered under physical s, while cash and kind dues receivable and shares, deposits, etc., were considered under financial s. Average value of these s owned per households is named as AVA. etc., and cash and kind dues receivable and cash in hand were considered under Statement 3.1 gives, along with AVAs, the percentage of households reporting ownership of some s. It is seen that 98.3% of rural households and 93.5% of urban households reported owning some kind of physical or financial s. Wide variation in AVA is observed between the rural and urban areas. A rural household, on an average, owned s of Rs. 10 lakh, which was less than half of s owned by the urban household (Rs. 23 lakh). NSS Report No.570: Household Assets and Liabilities in India

26 Chapter Three P a g e 17 Statement 3.1: Important indicators of and liabilities of India as on indicators rural urban (1) (2) (3) % of households owning s Incidence of Indebtedness (%) Average Value of Assets (` 000) per household Average Amount of Debt (`) per household Average Amount of Debt (`) per indebted household Debt-Asset Ratio (%) Ref: Table 1R/U, Appendix A The percentage of the indebted households is named as incidence of indebtedness (IOI) The percentage of indebted households, representing incidence of indebtedness (IOI) and average amount of debt (AOD) per household as on for rural and urban areas of India are presented in Statement 3.1. The results show that the IOI was about 31.4 % among the rural households and 22.4% among the urban households. The AOD per household was less in the rural sector than in the urban, the values being Rs and Rs , respectively. The 'debt-' ratio(dar)is defined as the average amount of debt (AOD) outstanding on a given date for a group of households expressed as a percentage of the average amount of s (AVA) owned by them on that given date. Reference date is It may be seen from Statement 3.1 that as on , the 'debt-' ratio at the - India level was found to be 3.7% for the urban areas and 3.2% for the rural India. 3.2 Average Asset Holdings in Different Household Types The is determined on the basis of the income earned by the household from different sources during the 365 days preceding the date of survey. Details of the classifications are given in Chapter 2. The is determined on the basis of the income earned by the household from different sources during the 365 days preceding the date of survey Statement 3.2 gives, proportion of households owning s along with AVAs for each in rural and urban area separately for male-headed and female-headed households. NSS Report No.570: Household Assets and Liabilities in India

27 Page 18 Summary of Findings Statement 3.2 : Percentage of householdsowning s, average value of s(rs.) per household as on by and sex of head of household household type % of households in the type sex of head of household male female avg. value of s per household (`000) % of households in the type avg. value ofs per household (`000) % of households in the type avg. value of s per household (`000) (1) (2) (3) (4) (6) (7) (8) Rural self-empl. in agri self-empl. in non-agri regular wage/salaried casual labour in agri casual labour in non-agri others estd.no. of hhs (00) Urban self-employed regular wage/salaried casual labour others estd. no. of hhs (00) Wide variation in AVA is observed between the s in both rural and urban areas. As expected, households with casual labour both in rural and urban area were having lower AVA than self employed or regular wage/salaried household irrespective of the sex of head of household. AVA was less for female-headed households in rural and urban area, with an exception for the casual labour in nonagriculture in rural sector It shows that among female-headed households there was relatively higher percentage of others category of in both rural and urban sectors. These households were presumably remittance recipients, pensioners and rentiers etc. 3.3 Average Asset Across Decile Classes of Household Asset Holding If rural households in India were ranked by value of holdings, the bottom 10% of households may be referred to as the lowest decile class, the next 10% as the second decile class, and so on up to the top 10% which is ced the 10 th or top decile class. In this document estimates of various characteristics are presented separately for households in the ten decile classes. Decile classes are defined separately for rural and urban households at - India level. NSS Report No.570: Household Assets and Liabilities in India

28 Chapter Three P a g e In some subsequent tables, the different decile classes (for details refer page B-3 of Appendix B) are referred to simply as 1 (lowest decile class), 2, 3, 9, 10. Thus, for example, the words decile class 2 (or 10-20% ) in a table for a particular state at a particular sector, say rural sector, means rural households of that state fing in the second (second lowest) decile class of the estimated -India distribution of rural households by holding size. The rural and urban distributions can themselves be depicted through the 9 deciles representing the 10%, 20%,..., 90% points of the distribution; this is done for -India in Fig.3.1. Statement 3.3: Average value of s (Rs.) across decile classes of household holding: -India decile class of household holding upper limit (`) rural average value of s (`) upper limit (`) urban average value of s (`) (1) (2) (3) (4) (5) Average value of s as on 30 th June 2012 was estimated as approximately Rs lakh in rural India and Rs lakh in urban India. This may be noted in this connection that for the first four decile classes AVA of rural area were higher than its respective urban counterpart. For the first three deciles these differences were substantiy higher.however, for higher decile classes the situation was just reversed. The spreading of AVA among urban decile classes (from lowest to the top decile class) is much wider compared to the rural classes The lowest 10% of India s rural households (in terms of total s) had an average value of Rs The lowest 10% of the urban households had an average value of Rs.291 implying that poorest (in terms of ) urban population is owning very little (as durables are not considered as physical in this round). The top 10% of rural households, ranked by s, had an average of Rs.57 lakh. The top 10% of the urban population on the other hand had an average of Rs. 146 lakh. NSS Report No.570: Household Assets and Liabilities in India

29 Page 20 Summary of Findings Fig 3.1: Deciles of the -India rural and urban distributions of households by : rural, urban rural Assets (Rs.) urban % of hhs below the level 10% 20% 30% 40% 50% 60% 70% 80% 90% 3.4 Inter-State Comparison of Average Value of Assets Statement 3.4 shows the AVAs as on along with the state to -India ratio of AVA (RSAI AVA ) in 18 selected states. RSAI AVA for a state is defined as ratio of Average Value of Assets (AVA) for that state to the -India AVA; Thus RSAI AVA = AVA of the state/ AVA at -India In rural areas: A state-wise analysis of AVA shows that it was the highest in Haryana (Rs lakh), followed by Punjab (Rs lakh), and Kerala (27.30 lakh). Odisha had the lowest AVA with Rs lakh per household preceded by West Bengal (Rs lakh), Andhra Pradesh (Rs lakh), and Assam (Rs lakh) In urban areas: The states that reported very high AVA were Maharashtra (Rs lakh), Kerala (Rs lakh), and Haryana (Rs lakh). Incidenty, AVA per household of rural Haryana was also very high (46.17 lakh). Punjab, which was in second high position in the rural areas, reported lower urban AVA of Rs lakh. 5Odisha reported lowest ownership of s (Rs lakh), preceded by Jharkhand (Rs lakh), and Andhra Pradesh (Rs lakh each) This is also important to mention here that inter-state differential in AVA is higher in rural area than its urban counterpart Alternatively, when ratio of state to -India is analysed it is seen that in the rural sector in 7 states out of 18, the ratio was more than 1 and for only three cases it was more than NSS Report No.570: Household Assets and Liabilities in India

30 Chapter Three P a g e 21 double of the -India AVA. Very low ratio (less than half of -India AVA) was seen for only 4 states. For 12 states among 18 states the ratio ranges from 0.5 to 2. Statement 3.4: Average value of s (AVA) (Rs.) per household by household category in rural and urban areas of selected states State average value of s (AVA) (`) per household and AVA (` 000) rural state to -India ratio RSAI AVA AVA (` 000) urban RSAI AVA (1) (2) (3) (4) (5) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Ref: Table 1R/U, Appendix A In urban sector less dispersed situation is evident when ratio of state to -India is analysed. It is seen that in the urban sector only in 6 states out of 18, the ratio was more than 1 (that is state AVA was more than -India AVA). But these ratios were ranged between 1 to 2. Very low ratio (less than half of -India AVA) was seen for only 3 states. For 15 states among 18 states the ratio ranges from 0.5 to Fig 3.2 shows average value of s (in lakh) as on in 18 selected states for both rural and urban sector, where AVA of rural sector was arranged from lower to higher. NSS Report No.570: Household Assets and Liabilities in India

31 Page 22 Summary of Findings Fig 3.2: Average value of s (in lakh) as on in 18 selected states: rural, urban Odisha West Bengal Andhra Pradesh Assam Bihar Rural Jharkhand Telangana Urban Tamil Nadu Chhattisgarh Karnataka Madhya Pradesh Uttar Pradesh Rajasthan Maharashtra Gujarat Kerala Punjab Haryana Changes in Ratio of Average Value of Assets (AVA) of State to Corresponding AVA at -India level It is already mentioned that the definition and method of collection of value of of a household have undergone several changes. Most importantly, the values of land & building as on were recorded in the 70 th round as per their normative/guideline values, whereas in the previous rounds these were recorded as reported by the informant. Value of durable including bullion and ornaments was included in the value in the previous rounds whereas in 70 th round it was kept outside the purview of s (s ee to Chapter 1 for details). Thus, instead of direct comparison the extent of scattering is presented in the statement 3.5 on the basis of the derived ratio of state AVA to corresponding -India AVA for selected states (RSAI AVA ). Moreover, the value of durable goods and bullion and ornament were netted out from the estimates of AVA of AIDIS 1991 and It may be worth mentioning in this connection that in 1991 percentage share of household durables 1 (including bullion and ornament) was 5.9% in rural area and 11.6% in urban area. Corresponding figures for 2002 was 5.1% and 8.4% It may be seen that in rural area there is very little change in the relative position (ranking) of the states in respect of AVA during the two decades. Punjab, Haryana, Kerala 1 See Report 500: Household Assets and Liabilities as on NSS Report No.570: Household Assets and Liabilities in India

32 Chapter Three P a g e 23 have maintained their high AVAs and on the other hand, Orissa, Andhra Pradesh, Assam, West Bengal were found with low AVAs in the periods In rural areas, states like Punjab and Haryana which are traditiony developed in agriculture along with Kerala have shown significant upward growth in terms of this RSAI while some other states like Uttar Pradesh, Karnataka and Rajasthan have shown downward movement. It may be noted in this connection that for AP, Assam, Bihar, Odisha and West Bengal RSAI were less than 1 for these three AIDIS and the ratio is showing a descending tendency over time In urban areas, this statement shows similar features as for that in the rural areas. High AVA was recorded for Maharashtra, Kerala, Haryana Punjab (first three positions) for these three AIDIS rounds. The situation of the states in respect AVA in the urban areas did not change much during the two decades, except in the case of Assam and Chhattisgarh which has shown significant upward movement in terms of AVA. In Rajasthan, UP and Gujarat notable f in RASI is observed. Statement 3.5 State to -India ratio of AVA (RSAI AVA ) for selected states during 1991(48 th round), 2002 (59 th round) and 2012(70 th round) State rural RSAI AVA urban (1) (2) (3) (4) (6) (7) (8) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India NSS Report No.570: Household Assets and Liabilities in India

33 Page 24 Summary of Findings 3.6 Composition of Household Asset Holdings The information on value of s, physical or financial, as collected under s are grouped in broad category like (i) land and building, (ii) livestock and poultry, (iii) machinery and equipment and (iv) financial s and shown in Statement 3.6 for occupational categories of rural and urban India (Ref: Table 7R/U, Appendix A). Statement 3.6: Percentage share of different components of s in the total value of s for each occupational category of households: -India broad type of s cultivator % share over broad typeof s by households classified by rural noncultivator selfemployed urban others (1) (2) (3) (4) (5) (6) (7) land & building livestock & poultry machinery& equip # financial s * # includes agriculture machinery & equip., non-farm business equip., transport equipment * include amount receivable, value of shares and debentures held and deposits with bank, non-banking companies, MFI, SHG, PF etc., insurance excl. bullion and ornaments Financial Assets includes amount receivable, value of shares and debentures held and deposits with bank, non-banking companies, MFI, SHG, PF etc., insurance Land and building together, in the rural areas, clearly formed the predominant component of s jointly holding around 94% share in the total value of s at the national level. Rest of share was contributed by combining other s like livestock (1.6%), machinery and equipment (3%) and financial s (2%). In the urban areas also, 92%share in the total value of s at the national level was observed in land and building together. As expected, share of livestock was insignificant in urban area. On the contrary, the share of financial is much higher (5%), and share of machinery and equipment was around 3%, similar to rural sector The share of other items of s rarely exceeded 5% even when the occupational categories are considered separately. In the urban areas, about 7% share in the total value of s was held in the form of financial for the others households Fig. 3.3 shows the percentage shares of different components of s in the total value of s at -India level for rural and urban households respectively. NSS Report No.570: Household Assets and Liabilities in India

34 Chapter Three P a g e 25 Fig. 3.3: Percentage share of different components of s in the total value of s: rural, urban 100% % distribution of s 90% financial s machinery livestock & poultry land & building 80% cultivator non- cultivator selfemployed others rural urban State-wise Composition: The distribution of value of s over the main items of s ( land, building and others) is given in Statement 3.7 for rural and urban areas of 18selected states. It is seen that land and building together, clearly formed the major component of s. In rural area the share of other items of s exceeded 10% only in Assam and Odisha It is, however, observed together with the statement 3.4 that in the states (like Haryana, Punjab, Gujarat) with high AVA, much higher proportion of land is also noticed. This may be primarily contributed by the extent of land (owned) by the households as well as high land price. On the contrary, in states with low AVA (like Andhra, Assam, Wes t Bengal) a comparatively lower percentage for land is recorded. In urban area, the share of other items of s exceeded 10% in 7 out of 18 selected states; maximum share was recorded in Odisha (26%) where lowest AVA is recorded. Moreover, Maharashtra w as the only state, where in urban area share of building was more than that of land. NSS Report No.570: Household Assets and Liabilities in India

35 Page 26 Summary of Findings In Appendix A, the break-up of value of s by different items of and proportion of households (per 1000) reporting those items is given in Table 6R/U and Table 7R/U for States/UTs for the rural and urban sector respectively. Statement 3.7: Percentage shares of land, building and other s in total s of households as on % share of s for States rural urban land building others land building others (1) (2) (3) (4) (5) (6) (7) (8) (9) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Ref: Table 7R/U, Appendix A Change in percentage share over three decades: It would be of interest to study the relative importance of different items of s over the two decades. However, it has to be kept in mind that the definition and method of collection of value of of a household have undergone several changes (see to Chapter 1 for details). The percentage shares of different items in the total s derived from the present survey data along with those obtained from the earlier surveys in 1991 and 2002 for the rural and urban sector are presented for -India in Statement 3.8A. The percentage shares of items for the earlier rounds have been suitably modified excluding the value of durable goods including bullion and ornaments Land and building have remained the most important components of s owned by rural as well as urban households. In the rural areas, the percentage of the value of land and building to the value of total s varied in between 87 to 94 per cent during three AIDIS surveys ( 1991 to 2012) for occupational types. The corresponding range for land and building in the urban areas was 80 to 94 per cent during the similar NSS rounds. NSS Report No.570: Household Assets and Liabilities in India

36 Chapter Three P a g e 27 Statement 3.8A: Percentage share of different items of s in total household s by occupational category of households during 1991, 2002 and 2012 occupational type year land building % share of different items of s in household s livestock & poultry machinery & equip. # other s shares etc. deposits* etc. amount receivable (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) rural cultivator noncultivator urban selfemployed others * includes amount receivable and deposits like government deposits, NSC, KVP, saving bonds, post office deposits, other sm savings schemes etc, deposits with bank, non-banking companies, MFI, SHG, PF etc., insurance excl. bullion and ornaments # includes agriculture machinery & equip., non-farm business equip., transport equipment No noticeable change in relative position of land, building or other items of s in the total value of s is visible. But the share of land has increased considerably during this last decade possibly due to price escalation of land both in urban and rural area. The share of other s in the total value of s appeared to have reduced during the last two decades. F in contribution of shares in 70 th round as compared to the earlier AIDIS rounds can be noted. The decline of share of deposit in 70 th round from the 48 th and 59 th round AIDIS is clearly shown It may be worth mentioning in this connection that in 1991 percentage share of household durables 2 (including bullion and ornament) was 5.9% in rural area and 11.6% in urban area. Corresponding figures for 2002 was 5.1% and 8.4%. 2 See Report 500 Household Assets and Liabilities as on NSS Report No.570: Household Assets and Liabilities in India

37 Page 28 Summary of Findings Statement 3.8B: Percentage of households reporting different items of s during 1991, 2002 and 2012 at rural and urban India s rural %. of households reporting in urban (1) (2) (3) (4) (5) (6) (7) land building livestock & poultry Farm business equip non-farm business equip transp. equip share etc deposits etc loan receivable any 99.8* 99.9* * 99.8* 93.5 * inclusive of durable goods Ref: Table 6R/U, Appendix A Statement 3.8B shows Percentage of households reporting different items of s for last three AIDIS rounds. In rural area percentage of households reporting land as well as building has gone up marginy in successive rounds whereas in the urban area, there was considerably high increase from 48 th round to 59 th round but little decrease from 59 th to 70 th round. Percentage of households possessing Farm business equipment is showing decreasing trend, but transport equipment is having increasing trend in both rural and urban area. 3.7 Possession of Rural and Urban Land by Decile Class of Household Asset Holding Proportion of households reporting rural and urban land along with average area of rural and urban land possessed by each household holding class separately for reporting households and households is presented in the statement 3.9R and 3.9U For the first time in the AIDIS of 70 th round, area and value of land possessed by the rural households in the urban area and similarly area and value of land possessed by the urban households in the rural area were recorded. It is clearly evident from this table 3.9Rand 3.9U that 94% rural households were having land in rural and only 1% owned some land in urban areas also whereas in urban area, 57% households had land in urban area and as high as 15% had land in rural area. From 8 th decile class onwards this proportion was more than 20%. NSS Report No.570: Household Assets and Liabilities in India

38 Chapter Three P a g e 29 Statement 3.9R: Proportion of rural households reporting rural and urban land, average area of rural and urban land in each household holding class household holding class average area (ha.) rural land average area (ha.) per reporting hhs %. of hhs reporting average area (ha.) urban land average area (ha.) per reporting hhs %. of hhs reporting (1) (2) (3) (4) (5) (6) (7) The urban households, on the other hand, households belonging to first decile class of holding did not report any ownership of land both in rural and urban area. Rest was having some rural land in their possession. As expected, households in the highest decile class owned the largest area in both urban and rural area. Statement 3.9U: Proportion of urban households reporting rural and urban land, average area of rural and urban land in each household holding class household holding class average area (ha.) rural land avg. area (ha.) per reporting hhs %. of hhs reporting avg. area (ha.) urban land average area (ha.) per reporting hhs %. of hhs reporting (1) (2) (3) (4) (5) (6) (7) NSS Report No.570: Household Assets and Liabilities in India

39 Page 30 Summary of Findings It may be noted that from second decile onwards urban households are having some land both in rural and urban area. As expected, area possessed by the households (both in urban and rural area) is showing increasing trend when one moves from lower to higher decile classes, and in the 10 th decile class it is more than 2 ha in rural area and 0.2 ha in urban area. 3.8 Incidence of Indebtedness (IOI) and Average Amount of Debt (AOD) This report also deals with some basic estimates of the indebtedness of households.in the 70 th round survey, a household was considered to be indebted if the household had any cash loan outstanding on It may be noted that like most NSS estimates, these are based on information collected through the interview method and hence, in fact, refer to reported indebtedness In statement 3.10, the average amount of outstanding amount per household and per indebted household along with average holding of financial s per householdare presented In rural sector, average amount of debt (AOD) was found to be Rs as opposed to reported amount of financial s of approximately Rs on an average. At the same time more than Rs. one lakh (Rs ) AOD per indebted household was also observed In urban India, however, at the -India level, the AOD per households was found to be Rs Amount of financial hold by the urban household was Rs AOD per indebted household was about Rs. 3.8 lakh, which was roughly 4.5 times of the AOD. Statement 3.10: AOD, AOD per indebted households and average holding of financial for rural and urban households: - India sector average value of financial s per households(`) AOD per household (`) AOD per indebted household (`) (1) (2) (3) (4) rural urban Ref: Table 1R/U, Appendix A 3.9 IOI and AOD across Asset Holding Classes The percentage of indebted households and average amount of debt per household as on for each holding class are presented in Statement 3.11 separately for rural and urban India. NSS Report No.570: Household Assets and Liabilities in India

40 Chapter Three P a g e 31 Statement 3.11: Incidence of indebtedness (IOI) and average debt per household (AOD) by holding class: -India decile class of hh holding IOI (%) AOD per householdold (`) (1) (2) (3) (4) (5) (6) (7) Ref: Table 1R/U, Appendix A rural AOD per indebted household (`) IOI (%) urban AOD per household (`) AOD per indebted household (`) Fig. 3.4 shows the IOI and AOD per households by holding class at -India level for rural and urban households respectively. Axis for AOD is shown in the left hand axis whereas the axis for IOI is shown in the right hand axis. Fig. 3.4: Incidence of indebtedness (IOI) and average debt per household (AOD) by holding class in India: rural, urban AOD (Rs.) - Rural AOD (Rs.) - Urban AOD (Rs.) per household IOI -Rural IOI -Urban s holding class 5 0 NSS Report No.570: Household Assets and Liabilities in India

41 Page 32 Summary of Findings It is seen that both in rural and urban areas, IOI increased as one moves from lower to higher decile classes. However, a marginal drop is noted in a couple of classes. IOI is seen to range within 20% to 43% over the decile classes in rural India whereas in urban India it varied within a range from 9% to 32% Predictably, AOD is seen to increase more or less steadily as one moves from lower to higher decile classes for both the sectors. AOD of a household belonging to the highest holding class was about 12 times that of a household in the lowest holding class in the rural sector. This ratio was even much higher for urban areas. The AOD per indebted household of the top decile class was 5.5 times of bottom decile class in rural India and 21 times in urban India 3.10 Temporal Changes in Household Indebtedness Statement 3.12 below shows estimates of -India AOD from three AIDIS including the 70 th round survey For rural India, real AOD (measured using a price deflator with =100 as base) is seen to have grown about five times from Rs.1115 in 1991 to Rs in 2012 a huge increase over 20 years In urban India also there has been similar high growth in real AOD (obtained using a deflator with base 1982=100) from Rs in 1991 to Rs in Over the 10-year period since 2002, the real rural AOD at 2012 has been about 2 times of the rural AOD at 2002 and during the similar time duration the in urban area 3.5 times increase is witnessed. Statement 3.12: Growth in AOD at current and constant prices since 1991, -India year characteristics (1) (2) (3) (4) AOD: rural (Rs.): current prices Price deflator for rural sector* AOD: rural (Rs.) prices AOD: urban (Rs.): current prices Price deflator for urban sector* AOD: urban (Rs.) at 1982 prices *Price deflators for the years have been computed, with the help of CPI-AL for the rural sector and CPI-IW for the urban sector with suitable linking factor 3.11 IOI and AOD across States IOI and AOD in different States: IOI along with the state to -India ratio of AOD per household (RSAI AOD ) state to -India ratio of AOD per indebted household in 18 selected NSS Report No.570: Household Assets and Liabilities in India

42 Chapter Three P a g e 33 states for different occupational categories of rural households are presented in Statement 3.13R and 3.13U for the major states for rural and urban area respectively. RSAI AOD for a state is defined as ratio of Average Amount of Debt for that state to the -India average; Thus RSAI AOD = AOD of the state/ AOD at -India Statement 3.13R: IOI, RSAI AOD (per household) and category for selected states: rural State RSAI AOD (per indebted household) by household cultivator non-cultivator IOI RSAI AOD (indebted RSAI AOD hh # ) IOI RSAI AOD (indebted RSAI AOD hh # ) IOI RSAI AOD (indebted RSAI AOD hh # ) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Ref: Table 1R/U, Appendix A #: AOD per indebted household From the statement 3.13R a wide variation in both IOI, over the occupational categories and states is observed. The IOI was high (40% or more) in the southern five states (Kerala, Andhra Pradesh, Tamil Nadu, Telangana and Karnataka) in rural India for occupational categories except the non-cultivator category of Tamil Nadu while in categories of Assam and non-cultivator category of Chhattisgarh and Jharkhand low IOI (15% or less) were recorded. In rural sector Telangana was the most indebted state as reported in 70 th round AIDIS. Statement 3.13U shows that IOI for urban households varied NSS Report No.570: Household Assets and Liabilities in India

43 Page 34 Summary of Findings widely, over the occupational categories and states. Both for rural and urban households, indebtedness were high in southern states It distinctly reveals higher incidence of indebtedness among the urban households in the five southern states (Kerala, Andhra Pradesh, Tamil Nadu, Telangana and Karnataka). IOI for other states was except Rajasthan less than the national level incidence Among the self-employed, 13 states (Kerala, Karnataka, Maharashtra, Odisha, Rajasthan, Assam, MP, UP, Bihar, Jharkhand, Chhattisgarh, West Bengal and Gujarat) varied within ± 50% around -India figure of self-employed category. On the other hand for others states were within ± 50% range except Kerala, Andhra Pradesh and Tamil Nadu In rural area, RSA AOD widely ranged among 0.1 to 4.5. For cultivator category the range was 0.1 to 4.4 while for non cultivator and for aggregate level it was 0.2 to 4.5. For the cases maximum ratio was identified in Kerala. Although IOI was higher for southern states, AOD per indebted household was highest for Kerala, closely followed by Punjab. RSAI AOD (per indebted households) for eight states including other southern states were close to India and for rest states it was much below the national average. Statement 3.13U: IOI, RSAI AOD (per household) and category for selected states: urban State RSAI AOD (per indebted household) by household self employed others IOI RSAI AOD (indebted RSAI AOD hh # ) IOI RSAI AOD (indebted RSAI AOD hh # ) IOI RSAI AOD (indebted RSAI AOD hh # ) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Ref: Table 1R/U, Appendix A #: AOD per indebted household NSS Report No.570: Household Assets and Liabilities in India

44 Chapter Three P a g e In urban area, RSA AOD varied among 0.2 to 2.1. In self-employed category the upper range was 2.8, and for others the same was 1.8. The range of RSA AOD for indebted household was 0.4 to 2.5, while the same for self employed category was as high as 0.3 to 3.5. In urban area RSAI AOD per indebted households is highest for Haryana followed by Odisha. In selfemployed category highest RSAI AOD (as high as 3.5 times of national average) was observed for Odisha Temporal Changes in IOI in Selected States The estimates of IOI obtained from the AIDIS-2012 along with AIDIS-1991 and AIDIS-2002 are given in Statement 3.14 for both rural and urban areas of the selected states. The estimates show that in the rural area the IOI increased steadily (more than 5 percentage points) during the period AIDIS ( 2002) to AIDIS ( 2012) in states like, Kerala, Andhra Pradesh, Karnataka, Tamil Nadu, Bihar, Uttar Pradesh and Punjab. IOI remained the same as in 2002 for Odisha. The IOI dropped during same period in Gujarat, Haryana and Madhya Pradesh and Chhattisgarh. Statement 3.14: Incidence of Indebtedness (IOI)(%)in rural and urban areas of selected states in 1991, 2002 and 2012 incidence of indebtedness (IOI) (%) State rural urban (1) (2) (3) (4) (5) (6) (7) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Comparing the estimates of percentage of indebted urban households obtained from last three AIDIS (19 91,2002 and 2012) it is seen that among the 18selected states, 5 states NSS Report No.570: Household Assets and Liabilities in India

45 Page 36 Summary of Findings (Chhattisgarh, Gujarat, Haryana, Madhya Pradesh and West Bengal) showed decreasing trends during the similar periods This may be commented in this regard that the southern states, which have relatively high IOI in rural areas currently also had high IOI previous years as well and this indebtedness in southern states has also increased much faster than average Assam, where the lowest IOI in 70 th round was recorded in rural area, also had the lowest IOI during 1991 and 2002 as well. Similar is the case for other states (like Chhattisgarh, Jharkhand, West Bengal) where relatively low (with reference to -India IOI) are observed; low IOI was observed in earlier rounds as well. Thus this indebtedness may be looked as a phenomenon of access, availability as well as circumstantial demand within a region There are significant differences in the rate and pattern of change between rural and urban areas. IOI is consistently and in most cases lower in urban areas; and the increase is also smer over. This generalized feature coexists with considerable inter-state variation. In southern states the increase is markedly higher; among others some don t show a consistent trend; while some showed a decline Debt-Asset Ratio (DAR) At any point of time, the outstanding debt of a household is potentiy a charge upon its s - whether or not these are mortgaged or hypothecated to a person or an agency. For a given group of households, a question natury arises how was the debt outstanding for them related to their s on any given date? A study of the 'debt-' ratio is likely to provide an answer to such a query. The 'debt-' ratio is defined as the average amount of debt outstanding on a given date for a group of households expressed as a percentage of the average value of s owned by them on the given date. Thus, this ratio reflects the burden of debt on any particular group of households on a given date i.e It may be seen from Statement 3.15 that as on , the 'debt-' ratio at the -India level was found to be 3.7% for the urban areas and 3.2% for the rural India. The 'debt-' ratio is defined as AOD as percentage of respective AVA DAR = (AOD 100)/AVA on a given date for a particular group of households The financial can be assumed, to be converted into cash in a short time, with little or no loss in value and hence can be termed as liquid s. Thus the ratio of AOD as percentage of respective average value of liquid of a group of household as on reveals an additional insight of the debt burden. From 70 th round AIDIS the ratio of debt to average amount of financial (%) for rural sector was 174 and the same for urban sector was 77. NSS Report No.570: Household Assets and Liabilities in India

46 Chapter Three P a g e 37 Statement 3.15: Important indicators of debt- of India as on indicators rural urban (1) (2) (3) Incidence of Indebtedness (%) Debt-Asset Ratio (%) Ratio of Debt to average amount of financial (%) Debt-Asset Ratio across Asset Holding Classes: The debt- ratio, as seen in Statement 3.16, decreased almost monotonicy with the increase in s in rural India. The ratio was 39% for the lowest decile class and reduced to 2% for the top decile class in the rural sector In urban sector debt- ratio for the bottom decile class was as high as 1920% implying the fact that in urban area debt burden for the lowest class was extremely high. The debt- ratio for the second lowest class was also high (125%) but it was more than 93% drop from the first decile class. From the third decile class onwards decrease in DAR was regular with the increase in decile class (except 9 th decile class, which showed a sm increase over 8 th decile class); finy dipping at 2.74% for the top decile class. Statement 3.16: Average amount of debt (AOD) and debt- ratio (DAR) by household holding class: -India decile class of hh holding AVA (`) rural AOD (`) debt- ratio (%) AVA (`) urban AOD (`) debt- ratio (%) (1) (2) (3) (4) (5) (6) (7) Ref: Table 3R/U, Appendix A Debt- Ratio in States: Following statement 3.17 (Ref: Table 1R/U, Appendix A) depicts the Debt- Ratio (DAR) in major states for occupational categories of households. It is observed that DAR varied widely over the occupational categories and states. While Haryana recorded the lowest and Andhra Pradesh recorded the highest DAR in rural area, Assam reported to have the lowest and Odisha recorded the highest DAR in urban area. NSS Report No.570: Household Assets and Liabilities in India

47 Page 38 Summary of Findings Statement 3.17: Debt- ratio (%) of the households for different occupational categories of households as on rural urban State noncultivatoemployed self- cultivator others (1) (2) (3) (4) (5) (6) (7) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India Temporal Changes in Debt-Asset ratio Changes in Debt- Ratio in States: Statement 3.18 shows the changes in debt- ratio (DAR) during, 1991 to 2012 by selected states for both rural and urban sector. However, it has to be kept in mind that the definition and method of collection of value of of a household have undergone several changes (see to Chapter 1 for details) Statement 3.18 reveals that in the rural areas, debt ratio (DAR) had a rise from 1991 to 2002 for states except West Bengal and rate of increase was very high for Andhra Pradesh, Bihar, Gujarat, Kerala and Madhya Pradesh. Scenario is different from 2002 to It is important to note in this connection that five southern states, Rajasthan, and Odisha high debt ratio (higher than national DAR) was recorded for three AIDIS. Madhya Pradesh and Maharashtra was also in this list for the year 1991 and as well. All these states other than Andhra Pradesh, Karnataka and Odisha, showed decreasing rate; for Kerala and Madhya Pradesh the extent of decline was more. Among rest of the states, rise of DAR was highest in Assam followed by West Bengal In urban area, debt ratio ( DAR) of 2002 were higher than that of 1991 for states except Assam, Bihar, Karnataka, Punjab, Tamil Nadu and Uttar Pradesh and rate of NSS Report No.570: Household Assets and Liabilities in India

48 Chapter Three P a g e 39 increase was very high for Andhra Pradesh, Bihar, Gujarat, Kerala and Madhya Pradesh. Extent of decadal increase of DAR was not as high as rural sector. Statement 3.18: Debt- ratio (%) for the selected states of India during 1991, 2002 and 2012 debt- ratio (%) State rural urban (1) (2) (3) (4) (5) (6) (7) Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal India In 2012 highest DAR was recorded for Odisha (14.7%) followed by Andhra Pradesh (11%) and Telangana (9% ). DAR for Gujarat, Kerala, UP, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Odisha were more than the national DAR. Among them Andhra Pradesh, Karnataka, Odisha, Tamil Nadu and UP had higher rate of increase, for Karnataka and UP the extent of growth was very high The following Fig. 3.5R/U shows selected state-wise Debt-Asset ratio for rural and urban areas for the last three NSS rounds (48 th, 59 th and 70 th rounds). NSS Report No.570: Household Assets and Liabilities in India

49 Page 40 Summary of Findings Fig 3.5R: Debt-Asset ratio for the selected states in 1991, 2002 and 2012: rural Fig 3.5U Debt-Asset ratio for the selected states in 1991, 2002 and 2012: urban WB UP Tamil Nadu Rajasthan Punjab Odisha WB UP Tamil Nadu Rajasthan Punjab Odisha Maharashtra MP Kerala Karnataka Maharashtra MP Kerala Karnataka Jharkhand Jharkhand Haryana Haryana Gujarat Gujarat Chhattisgarh Chhattisgarh Bihar Bihar Assam Assam AP AP debt- ratio debt- ratio 3.15 Financial Inclusion of households and Owning of Bullion and Ornaments For the first time in the AIDIS of 70 th round information was collected from households whether they have any bank/post office/other deposit account in order to evaluate the financial inclusion of the households. Statement 3.19 shows the Proportion of households having bank account, Post Office account and any other deposit accountin selected states for both rural and urban sector In rural area, 69% households had at least one bank account in the name of household member. At the same time 14% households had at least one post office account in the name of household member and only 9% had other types of deposit account. In rural sector11 states had higher proportion of bank account than the national level proportion, Kerala being the top of this list with 90% households. In fact, proportion of households having bank account of the states varied within ±40% around -India figure. NSS Report No.570: Household Assets and Liabilities in India