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Rural India Is Recovering From the Cash Ban

  • Loans poised to reach pre-demonetization levels in 3-6 months
  • Falling farm prices have boosted real wages for landless
A farmer works in a millet field while cattle graze nearby on the outskirts of Bengaluru, India, on Friday, June 9, 2017. Millets were a staple in India for thousands of years, but largely spurned since a so-called Green Revolution last century led to cheaper, more abundant supplies of refined rice and wheat flour that can bolster blood-sugar. Now a surge in type-2 diabetes is pushing doctors and government officials to recommend a return to wholegrains, like “ragi” or finger millet, that healthfully sustained previous generations.
Photographer: Dhiraj Singh/Bloomberg

India’s vast rural hinterland, which makes up 70 percent of the South Asian country’s population, is showing signs of recovery from last year’s cash crunch, boosting optimism that increased spending will help the broader economy regain its vigor.

The micro-finance industry is rebounding, real rural incomes are rising and unemployment is falling, according to brokerage Motilal Oswal Securities Ltd. and an Indian unit of HSBC Holdings Plc in analysis that contrasts to the distress that’s swept the farming sector.