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 -- pointing to a turnaround from a drought-driven slump in 2014 and 2015 and shock from demonetisation in 2016. Normal rainfall in 2016 and 2017 helped revive activity, and the outlook for another year of good rains bodes well for 2018. In this note, we introduce the rural tracker in detail.

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 -- pointing to a turnaround from a drought-driven slump in 2014 and 2015 and shock from demonetisation in 2016. Normal rainfall in 2016 and 2017 helped revive activity, and the outlook for another year of good rains bodes well for 2018. In this note, we introduce the rural tracker in detail.