The Rural Quagmire
Amaresh Bagchi
RURAL MONEY MARKETS IN INDIA by Subrata Ghatak Macmillan, New Delhi, 1977, 230 pp., 58.00
Jan-Feb 1977, volume 2, No 1/2

In economic matters judgements ba­sed on statistically tested hypotheses are surely to be preferred to hunches or guesses however clever. Where how­ever ‘facts’ derived through statistical analysis fly in the face of what is widely believed to be the reality, before procee­ding to accept them without reservations one has to take care to see that the data do not suffer from any infirmity that might vitiate the findings and that the inferences do not go beyond what is strictly warranted by the techniques employed. For statistical analysis, though useful as a check against snap judgements, has its limitations and in any case cannot help to quantify facts not fed into it.Ghatak does not seem to be inhibited by any such qualms while claiming origi­nality for fitting least square equations to rural credit data and drawing such conclusions as that interest rates in the Indian rural economy are not high or usurious—they range no higher than 15 or 17 per cent.

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