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