Slowdown to extend as virus goes rural
Context: India is staring at a protracted slowdown as corona virus cases reach its countryside
Background:
- The world’s No.5 economy reports first-quarter GDP data on Aug 31 and according to a Reuter’s poll, it is likely to have contracted 20% over April-June.
- It is forecasted to get shrink 5.1% in the year to March 2021, the weakest since 1979.
Reason:
- Sluggish consumer demand, slowdown in rural lending is cause for concern.
A mitigating factor:
- Momentum coming from the agriculture sector owing to a normal monsoon and robust sowing is a positive.
- Farmers planted almost 14% more between June 1 and July 31 than last year given good rains, while fertiliser output rose 4.2% in June.
India and agriculture (Data):
- Almost half of India’s 1.38 billion populations rely on agriculture, with the sector accounting for 15% of economic output.
Reference: https://www.thehindu.com/business/Economy/slowdown-to-extend-as-virus-goes-rural/article32406458.ece