Asha Devi does not remember how many meals she has skipped as she struggles to feed her family of seven in a remote corner of northern India where the novel coronavirus is compounding old problems of rural debt and poverty.

Devi, 35, had to mortgage her land for a 20,000 rupees ($ 270) loan and six months on, as the money runs out, she has stopped buying milk, halved her use of cooking oil and can afford lentils only about once every 10 days.

With her construction worker husband jobless, she is facing going deeper into debt to get by.

“Sometimes I go to sleep hungry. Last week, I think I went to bed hungry at least twice but I can’t remember,” Devi told Reuters news agency as she wiped away tears with her threadbare sari outside her mud house in her village in Uttar Pradesh state.

Prime Minister Narendra Modi’s government has promised free foodgrains for the poor but the rations are limited and not enough for the family, Devi said.

The coronavirus and a lockdown aimed at stopping it last year saw millions of people thrown out of jobs in cities and towns and forced back to their villages, and ever higher levels of debt.

Interviews with 75 households in a cluster of eight villages in India’s most populous state showed household incomes have slumped nearly 75 percent on average. Almost two-thirds of the households have taken on debt.

Devi’s husband used to have a job in construction in the more prosperous state of Punjab to the northwest, which kept the family going. Now the job is gone and he is back home and struggling to find work.

Others like him who have lost jobs crowd around a brick kiln near their village every day hoping for work.

A farmer feeds iceberg lettuce to his buffalo during a 21-day nationwide lockdown to slow the spreading of coronavirus disease, at Bhuinj village in Satara district, Maharashtra [File: Rajendra Jadhav/Reuters]

Heavy debt and low income in the countryside will hold back any economic recovery the government is trying to make and also dent private savings and investment for longer than expected, economists say.

“It will have a huge impact and prolong the recovery process. Private consumption and investments both will be hurt. There is merit in finding ways to put money in the hands of the people,” said NR Bhanumurthy, economist and vice chancellor at Bengaluru-based BR Ambedkar School of Economics.

India’s gross domestic product (GDP) fell by a record 7.3 percent in the financial year that ended on March 31. The government has forecast a 10.5 percent growth for 2021-22 but a second wave of the pandemic has dented expectations and several economists have cut their forecasts.

The poor have especially been hit hard.

The Reuters investigation showed most of the 75 households in the Uttar Pradesh cluster, a combined 518 people, have taken out a total debt of 6.12 million rupees ($ 82,250), more than 80 percent of which remains unserviced, the householders said.

Borrowing has risen by three times since the pandemic hit in March 2020 and about half of that was taken out in the past six months, the survey found.

With no jobs or with bread-winners sick, the cumulative monthly income of the 75 households has dropped to about 220,000 rupees ($ 2,960) from 815,000 rupees ($ 10,960) before the pandemic.

“Almost everyone is in debt in this village … unemployment is the biggest problem,” said 55-year-old Komal Prasad, a former headman of Gauriya, a hamlet in the cluster with a population of just more than 2,000.

Only about 30 percent of the people in Gauriya had a job or were looking for work, many fewer than before, villagers said.

Juggi Lal, a 35-year-old farmhand, said she was struggling to buy medicine for her disabled husband because there was no work and she owed 60,000 rupees ($ 806) to a moneylender.

“Every morning I wake up thinking what work will I get, how will I get through the day?”

The rural unemployment rate, which used to hover around 6 percent before the pandemic, rose to 8.75 percent in June, according to the Mumbai-based Centre for Monitoring Indian Economy (CMIE).

Manorami Rawat, 35, works at a furnace to extract peppermint oil in Dalipur village in the northern state of Uttar Pradesh [File: Saurabh Sharma/Reuters]

The mix of lower incomes, higher debt and rising prices of staples is dampening demand in the countryside where two-thirds of Indians live.

Sales of everything from biscuits, tea and lentils to auto parts have taken a hit, vendors say. Some have shut down shops that their families have run for generations.

Gosh Mohammed, 43, used to sell up to 8,000 rupees ($ 107) of groceries before the pandemic. Now it is down to 1,000 rupees ($ 13.5) a day.

He has taken 60,000 rupees ($ 800) worth of goods from a wholesaler on credit but has not been able to pay it off for six months.

“I never used to take goods on credit because buying with cash gets us more of a discount,” Mohammed said.

“Now I think I’ll have to shut my shop as wholesalers have stopped giving me credit and I have sold the goods on credit and that money isn’t likely to come back.”

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