Political Economy of Suicide: Financial Reforms, Credit Crunches and Farmer Suicides in India
Journal of Developing Areas, Volume 48, Number 4, Fall 2014, pp. 287-307.
21 Pages Posted: 29 Mar 2017
Date Written: August 28, 2014
Over 250,000 farmers have committed suicide in India since the mid-1990s. Studies – both case studies of states and at the individual-level - attribute these deaths to credit crunches in the agrarian sector and increased debt burden among farmers. Most of the farm suicides have, however, taken place in five of India’s 28 states, suggesting that adverse financial circumstances affected farmers only in some states. Why did mounting debt and credit crunches affect farmers only in some states? This paper offers an answer by relating farm suicides to the financial reforms the country undertook since the 1990s. Using an instrumental variables approach, it shows how increased competition in the banking sector diverted lending away from agriculture to create dire economic conditions that facilitated farm suicides in some Indian states.
Keywords: India, Economic Development, Agriculture, Farmer Suicides, Financial Liberalization, Bank Competition
JEL Classification: O110, O130, O160
Suggested Citation: Suggested Citation