In the Thaksin government's thinking, these schemes would deliver a stimulus by three principles, namely "l. reducing the people's expenses; 2. increasing the people's incomes; and 3. expanding the people's opportunities" (Pran 2004, 69). By targeting funds mainly to the rural grassroots, the government hoped for a strong multiplier ori grounds villagers would immediately spend any extra income rather than saving it, and would spend a high proportion on goods produced domestically. The government pushed out the village fund as quickly as possible, without seeming to care how the funds were spent and whether they could be recouped. Evaluation of the scheme was difficult because of politicization. Government claimed that default had been very low, and that a large percentage of loans from the village funds were used for "productive" expenditure. Independent surveys showed that many loans were used to defray other debt. More circumstantial observation suggested many loans were used to finance consumption.2
Average consumption expenditure per head had fallen by a fifth in the crisis (fig. 4.4). Driven by these stimuli, consumption climbed steadily to surpass the pre-crisis level in late 2002. Household debts also climbed. In 1994, the average household debt had been 3 1,079
Fig 4.4 Private consumption per head, 1993—2003