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One of the major problems concerning to the rural society is indebtedness. This problem is just not related to one individual but is passed on from one generation to the next generation. Taking or incurring debt for the purpose of agricultural production is indeed necessary as it contributes to production.
However, the rural people incur debts for non­productive purposes such as to meet the family needs, perform social functions (related to marriages, birth, death), litigation, etc. Since money taken does not contribute to production but instead to consumption, it drags the rural people into indebtedness.
Thus, it becomes impossible to repay these loans. To clear these loans, the rural people incur debts again. In this way, they are stuck in the clutches of indebtedness, which passes on from one generation to another. For many small farmers, the agricultural pro­duction is so less that they are not able to provide for such unproductive expenditure.
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