To examine the demand side of the equation, let me first provide a backdrop in Slide 9. Generally speaking, as households grow more affluent, the proportion of their income that they spend on food declines. This is a universal pattern and India is no different.
Analysis must focus in particular on the factors that together with the recession increase credit risk which, as we have seen, is a powerful obstacle to the supply of loans. The recent financial tensions have generally been viewed in relation to the problems of the banks, which in turn are connected to the recession and the sovereign debt crisis.