New rural index shows early signs of recovery from drought-driven slump

A slew of govt measures is driving sector's revival; however, demonetisation has worked as a speed bump

India’s rural growth appears to be picking up. It’s hard to overstate the importance of the rural economy -- its ups and downs determine broader growth and hold the key to political stability. Tracking rural activity though, is challenging given the dearth of data. The closest proxy --quarterly agricultural growth -- is released with a lag of two months. To fill this gap, Bloomberg Economics has created an India Rural Output Index -- a composite monthly gauge consisting of supply- and demand-side indicators that goes beyond agriculture to get a comprehensive view on the rural economy.

The latest signals are encouraging