Did the government rural reforms help rural demand or was it that rural India was less impacted by the COVID impact?

Actually it was a mix of both, government support and limited impact of COVID. Let us look at the COVID aspect first. COVID-19 has been more of an urban phenomenon. Social distancing was more relevant in crowded cities like Mumbai, Delhi and Bengaluru as rural India had its own ways to ensure social distancing due to limited urban exposure.

The location break-up of COVID-19 afflictions shows it is largely concentrated in urban clusters of Delhi, Tamil Nadu, Maharashtra, Gujarat and Karnataka. As a result, most of rural India did not see too much of economic impact of the pandemic. They also did not see any lag effect, a key factor keeping growth down in rural areas which the going is tough.

One must admit that the government also did its bit. Rural demand remained robust because government continued with its massive investments in rural infrastructure. It has sharply focused on job generation programs like the MNREGA. The MSP for most crops has been fixed at attractive levels with a view to doubling farm incomes by 2022.

Finally, there is the all important MSME sector that generates bulk of exports and jobs. The government has guaranteed loans worth Rs.123,000 crore to MSMEs to pull them out of a slowdown in demand. This was part of a special package announced by the Finance Minister. The rural thrust kept rural India immune from the COVID impact leading to a robust demand scenario.