According to Amartya Sen (1981), it is necessary to look at both ownership patterns and the forces that lie behind them in order to understand general poverty. Thus for a country like India where a majority of people are still below the poverty line, a study of trends and magnitudes of household assets and liabilities will be of crucial importance. In this paper, the trends in household assets and liabilities in India are critically examined and an interstate comparison is done in this regard. The analysis is done for rural and urban areas separately for all the states. The findings of All India Debt and Investment Survey (AIDS), conducted by National Sample Survey Organization(NSSO), once in ten years are used for the analysis in the paper.
In terms of average values of assets (AVA) in urban the states at the top are Jammu Kashmir, Kerala and Haryana and those at the bottom are Jharkand, Orissa, Assam, Chattisgarh, Bihar, West Bengal and Tamil Nadu. In rural, the top ranked states are Punjab, Haryana, Delhi, Jammu and Kashmir and Kerala while those at the bottom are Orissa, Andhra Pradesh, Assam, West Bengal and Jharkand. The compound growth rate calculated for the AVA’s over 1981-91 and 1991-2002 also gives the same ranking as above for all states. Comparing the AVA’s with indicators like percentage of people below poverty line and per capita income, it is seen that states with low percentage of people below poverty line also have higher AVA;s. However, the per capita income of Jammu and Kashmir which is less the national level does not support the finding. Cultivators in rural and self employed category in urban occupy top position with respect to AVA’s classified by occupational groups.
The trends in composition of household assets show that land and buildings constitute the major proportion both in rural and urban areas for both the top and bottom ranked states. Next comes the durable goods. This trend remains stable over time also. Financial assets remain significant in the overall asset structure. However, this finding needs to be treated carefully since the data collection on financial assets need not be feasible due to the reluctance of households to give accurate information on their financial assets.
The incidence of indebtedness reports high in Andhra Pradesh in rural and second in urban .Here, only a small portion of loans are financed by non institutional agencies. Though Kerala reports a high incidence of indebtedness, majority of them are financed by institutional agencies. In rural and urban, debt asset ratio is highest in Andhra, followed by Tamil Nadu and Maharashtra in rural and lowest in Jammu and Kashmir. In urban, Orissa has second highest ratio and Delhi has the lowest.
The results suggest that in spite of the reported IT boom and the resulting increase in percapita incomes, industrialization and people investing in land and real estate in the southern states like Andhra, Karnataka and Tamil Nadu. The AVA remains low. The finding for high AVA in Jammu seems to be an odd one due to the challenges faced by the state like terrorism, hilly location and absence of real estate market. However, these findings need some caution since Subramanian and Jayaraj (2006) after comparing with alternative sources of data have shown in their study the possibility of underestimation of household assets particularly in land, real estate and gold in the survey by a significant margin. Further after comparing with the data on institutional credit provided by lending agencies, the possibility of over estimation of institutional credit is also shown by them. Hence comparing the survey findings with all the other available sources may provide further insights in this regard.