The case for a rural stimulus
It is clear that not only has the govt failed to do anything to revive the sagging rural demand, it has also refused to acknowledge the demand problem
The fact that the economy is on a downward slide is no longer a matter of debate. It is neither a technical issue nor is it a transient blip which will go away on its own. However, matters are complicated as far as the reasons for the slide are concerned. The real debate is whether it is due to the structural issues leading to a supply shock or it is due to demand deflation in the economy. Any effort at recovery will depend on the correct diagnosis of the problem. Although demonetisation and unpreparedness of the government for the goods and service tax (GST) roll-out contributed to the deceleration in growth rates, the symptoms have been evident for much longer.