Why rural consumption may not drive up growth -Sanjay Kumar

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published Published on Sep 9, 2020   modified Modified on Sep 10, 2020


Rural India was battling economic difficulties even before the pandemic. The pandemic-induced lockdown increased hardships even further.

The historic contraction in India’s gross domestic product (GDP) figure for the June-ended quarter has raised several questions on what the future holds, and what that contraction has meant for ordinary people. Macro-economic statistics can often fail to capture the diverse realities of a country as large as India, and hence it is useful to complement them with data on lived experiences of people.

An analysis of a recently conducted rural survey suggests that the economic reality for most people may be far grimmer than what the headline GDP numbers suggest. The survey was jointly conducted by Gaon Connection and Lokniti-Centre for the Study of Developing Societies (Lokniti-CSDS) across 179 districts spread across 23 states and union territories of the country. Barring Kerala, south India was not covered in the survey, conducted between 30 May and 16 July. A total of 25,371 respondents were interviewed in this period, most of them in June.

The survey data shows that the pandemic-induced lockdown hit the livelihoods of most people in rural India very hard. More than three fourth of the respondents (78%) said that their work had either completely (44%) or largely (34%) come to a standstill due to the lockdown.

The survey suggests that rural distress was already high even before the covid-19 shock. But the covid shock raised hardships even further. Six out of ten respondents (60%) said that it was extremely or quite difficult to fulfil needs from their household income prior to the lockdown. After the lockdown was announced to combat covid-19, almost three-fourth (72%) found it hard to meet their household expenses. While the lockdown affected work and livelihoods across income classes, the change in economic conditions was sharpest amongst the lowest strata.

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Livemint.com, 9 September, 2020, https://www.livemint.com/news/india/why-rural-consumption-may-not-drive-up-growth-11599634532995.html

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