India's rural consumption crisis

NO NATION TRULY RISES WHEN ITS VILLAGES ARE LEFT BEHIND

- Pallavi Das

Rising urban demand, stock market surges, and optimistic GDP projections are now the dominant ways to celebrate India’s post-COVID economic recovery.

However, beneath this optimism lies an unfortunate paradox: rural India, home to almost two-thirds of the population, is suffering from a consumption slowdown that threatens the very base of national prosperity. This is not a temporary or cyclical slowdown, but rather a sign of deep structural distress. According to the Centre for Monitoring the Indian Economy (CMIE), rural unemployment in March 2024 was 7.4% — a stark indication of the suffering in the countryside. Simultaneously, data from the Labour Bureau show that between 2014 and 2022, real rural earnings for agricultural workers grew at a rate of less than 1% per annum. These incomes have not kept pace with inflation, which has eroded purchasing power.