From Land to Debt: Changing Livelihood Security among Rural Labour in India since early 1980s

Access to productive assets and credit is central to understanding the livelihood security and economic vulnerability of rural labour in India. This paper examines long-term changes in rural labour’s access to land and credit, with particular focus on the bottom 40 per cent of rural population, using unit-level data from relevant National Sample Survey Office (NSSO) Employment and Debt and Investment rounds. The analysis covers changes in access to land and credit since 1980s at the all-India and state levels. The findings reveal a substantial long-term decline in access to land. At the all-India level, average cultivated land declined from 1.169 hectares in 1983 to 0.343 hectares in 2019, despite a temporary recovery during the mid-2000s and early 2010s. Considerable interstate variation is observed, with particularly sharp declines in states such as Bihar, West Bengal, Uttar Pradesh, Odisha and Himachal Pradesh, while some states experienced different trajectories. The credit analysis indicates a simultaneous expansion of institutional and non-institutional borrowing. While both average institutional and non-institutional borrowings increased during the period of the study but rate of increase in average non-institutional borrowing has been higher and that the increasing volume of credit has not been accompanied by a corresponding expansion of productive investment. The share of borrowing devoted to household expenditure, health, housing and other consumption-related needs has increased, while borrowing for non-farm business and some forms of productive investment has declined. The paper argues that declining land access combined with rising consumption-oriented indebtedness has shifted rural labour from asset-based livelihood security towards credit-dependent coping. Strengthening rural labour livelihoods therefore requires not only greater access to formal credit but also improved land security, productive employment and stronger provision of essential public services.

Rural Labour; Land Access; Rural Credit; Indebtedness; Financial Vulnerability

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