The story "A Horse and the Two Goats" shows us a picture of stereotypical rural Indian society through imagery, indirect characterization, and language.
In the story, we are told that seven hundred thousand villages dot the map of India. We are also told that the majority of India's five hundred million residents live in these villages. Next, Narayan hones in on Kritam, the village that he has chosen as the setting for this story.
Kritam has fewer than thirty houses, and only one of them is built with brick and cement. We are told that the houses are primarily built of straw, bamboo thatch, and mud. Narayan juxtaposes these village houses with the only prosperous-looking house in Kritam. This particular house, we're told, is painted in blue and yellow and boasts gorgeous carvings of gods and gargoyles on its balustrade.
The lone opulent house is seemingly incongruent with the rest of the surroundings and further reinforces the poverty of rural India.
Narayan also highlights the impoverished village diet of millet, salt, drumstick leaves, and raw onions. From the description of the village to the food, we are given a picture of stereotypical rural Indian society.
We also learn much about Muni (the protagonist) from his interactions with the shopkeeper. Muni is so poor that he can't pay for his groceries without manipulating or playing on the shopkeeper's sympathies. More tellingly, Muni doesn't know his age, which reveals his poverty-stricken background. Many destitute Indians have no documentation revealing their year of birth, since many rural mothers cannot afford to birth their children in hospitals.
Another way the story shows us a picture of stereotypical rural Indian society is through language. Muni speaks Tamil and knows only a few English words. This is the main reason he can't understand what the foreigner is saying. Today, many of India's rural poor have little access to a education. Please refer to the link below for a modern take on the education crisis in India.
The portrayal of Indian society presented to us in "A Horse and Two Goats" is indeed largely stereotypical. The village of Kritam is mired in deep poverty, in keeping with the stereotypical image that many people have of the Indian subcontinent. The small village also inculcates a similarly small mindset. People aren't especially ambitious in this neck of the woods; high status is conferred by the ownership of sheep and goats.
But the stereotyped portrayal of rural Indian life serves a purpose. Because it's through such a skewed perspective that the hapless American tourist sees things, and this enables Muni to extract a large sum of money from him. The American is keen to experience what he thinks is the authentic rural India of backward peasants, mystical swamis, and strange, exotic superstitions. He assumes that the Indians are so poor that they'll gladly sell off some of their heritage—in this case, a statue of a horse—for a handful of rupees. Once he's shipped this piece of local heritage back to the States, the tourist will place it slap bang in the middle of his living room, where people can gaze in admiration at it while sipping their cocktails.