what is distress sale in indian economics
Dear Student,
Distress sale is basically used in context of Indian agriculture and especially for Indian farmers in the pre-independent period. As we know, Indian farmers were often characterised by 'indebtedness'. This term explains the reason behind the distress sale. Actually, as we all are aware of the fact that in the pre-independent period, India lacked the presence of quality infrastructure. The rural areas were not well connected with the urban areas and the markets (where the agricultural products were traded). On the other hand, the agricultural products being perishable products get spoil within a few days. Hence, the farmers cannot store their products and cannot sell them easily in the markets due to lack of quality infrastructure.
Thus, due to all the aforementioned reasons (borrowings from zamindars, lack of infrastructure, agricultural products being perishable products), the farmers were forcefully left with the only option to sell their respective products to the zamindars. To add to the misery, these zamindars used to take undue advantage of the farmers' helplessness in form of acquiring the farm products at a much lower price than the market price. In addition, malpractices such as underweighing etc. further worsen the overall situation for the Indian farmers. This is why such a sale by the Indian farmers is regarded as distress sale, since such sales didn't make the farmers happy.
Distress sale is basically used in context of Indian agriculture and especially for Indian farmers in the pre-independent period. As we know, Indian farmers were often characterised by 'indebtedness'. This term explains the reason behind the distress sale. Actually, as we all are aware of the fact that in the pre-independent period, India lacked the presence of quality infrastructure. The rural areas were not well connected with the urban areas and the markets (where the agricultural products were traded). On the other hand, the agricultural products being perishable products get spoil within a few days. Hence, the farmers cannot store their products and cannot sell them easily in the markets due to lack of quality infrastructure.
Thus, due to all the aforementioned reasons (borrowings from zamindars, lack of infrastructure, agricultural products being perishable products), the farmers were forcefully left with the only option to sell their respective products to the zamindars. To add to the misery, these zamindars used to take undue advantage of the farmers' helplessness in form of acquiring the farm products at a much lower price than the market price. In addition, malpractices such as underweighing etc. further worsen the overall situation for the Indian farmers. This is why such a sale by the Indian farmers is regarded as distress sale, since such sales didn't make the farmers happy.