Welfare shocks, coping strategies and safety nets: a study on rural households of Cachar District, Assam

Effective shock management is an integral part of any well-defined and comprehensive welfare strategy. As the type of shocks facing rural households in developing countries depends, inter alia, on local geographical, socio-economic and climatic conditions, micro-level studies profiling the exposure to shocks in specific regional contexts become important for designing and delivering programmes of economic development at the grass roots. Using primary data collected from 444 rural households, this study attempts to study various facets of household-level welfare shocks in Cachar District of Assam. Specifically, the research tries to identify the various sources of shocks confronting rural households in the study area along with the factors that determine exposure to different types of shocks. Also, factors influencing shock severity, frequency and choice of coping strategies are analysed using suitable econometric methods. Based on the finding that the incidence of shocks is very high in the rural areas of the district, the study also takes stock of the current coverage of insurance programmes available to rural households. It is found that while benefits of social insurance programmes are available only to a miniscule percentage of surveyed households, private insurance remains out of reach of most households due to the costly premiums payable on such schemes. The study underscores the need to improve social infrastructure to reduce the prevalence of certain types of shocks while designing effective and comprehensive social insurance programmes to provide the necessary safety cushion to rural households in times of distress.