As our analysis is based on two survey rounds, we use the wholesale price index to inflate all monetary values to 2015-16 rupees. As we want to discern the impact of structural transformation on the performance of rural non-farm enterprises, we focus on rural enterprises in Rajasthan. This provides a final sample covering over 13,000 enterprises across the two survey rounds. The summary statistics based on this sample are presented in Table 1B. We see that the median monthly enterprise revenue is INR 15,000 (2015-16 INR), which amounts to a little over 220 USD at the prevailing nominal exchange rate. Lacking an accurate measure of enterprise profits, we instead use value-addition as a measure of profitability where value-addition is defined as revenues less operating costs. Based on this formulation, monthly value-addition is INR 5,650 or 85 USD. The median enterprise has a stock of productive capital (machinery and tools) equal to INR 7,000 or a little in excess of 100 USD.

The vast majority of the enterprises covered are own-account enterprises, implying that the owner is also the sole worker. For enterprises which hire workers, the median enterprise size is 3 workers and the median monthly wage per worker is INR 2,500 (USD 35). Most of the enterprises are owned by males and have a median age of 6 years. Only 14% of the enterprises are registered with either state or local authorities. Forty percent are trading enterprises while almost 30% are engaged in manufacturing, with the remaining operating in other service activities. Surprisingly, only 10% of the enterprises have any outstanding credit, while only 2% have any outstanding bank credit. As the second wave of the survey was undertaken in 2015-16, covering the period following the large expansion of bank accounts provided under the PMJDY scheme since 2014.<sup>2</sup> . This indicates that the provision of a bank account alone was possibly not sufficient to increase credit access to micro-enterprises.

Almost half the enterprises reported facing some problem in this period, mainly the lack of demand and the inability to recover financial dues. However, leass than 6% mentioned facing problems due to the unavailability of electricity and less than 8% mentioned problems in accessing credit. Less than 1% of the enterprises claimed to have receive any assistance from the government over the past year.

# **2.3 Household Consumption Data**

Our data on household consumption is sourced from the household surveys conducted by the Centre for Monitoring the Indian Economy (CMIE). The surveys, collectively known as Consumer Pyramids (CP), were initiated in 2014, with a sample size exceeding 170,000 households. Households are surveyed thrice a year and information on their consumption, investment and borrowing over the past three months are obtained, in addition to household demographic characteristics. While the CP data oversamples urban households, we apply household-specific weights to make the data nationally representative. For the state of Rajasthan, the sample size is based on almost 2,500 rural and over 6,000 urban households. We restrict our sample to October 2016, prior to the “demonetization” episode. As the “demonetization” intervention is perceived by many economists to have started the current

> 2 The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched in September 2014 and aimed to provide a zero-cost banking account to every Indian adult.

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