Skip to content
Hindi News, हिंदी समाचार, Samachar, Breaking News, Latest Khabar – Pratirodh

Hindi News, हिंदी समाचार, Samachar, Breaking News, Latest Khabar – Pratirodh

Primary Menu Hindi News, हिंदी समाचार, Samachar, Breaking News, Latest Khabar – Pratirodh

Hindi News, हिंदी समाचार, Samachar, Breaking News, Latest Khabar – Pratirodh

  • Home
  • Newswires
  • Politics & Society
  • The New Feudals
  • World View
  • Arts And Aesthetics
  • For The Record
  • About Us
  • Featured

India Faces Protracted Slowdown As Virus Clouds Rural Revival

Aug 20, 2020 | Pratirodh Bureau

FILE PHOTO: Farmers plant saplings in a rice field on the outskirts of Ahmedabad on July 5, 2019

India is staring at a protracted slowdown as coronavirus cases reach its countryside, with signs of recovery in the rural economy hailed by Prime Minister Narendra Modi “at best a mitigating factor”, government officials and analysts said.

The world’s No.5 economy reports first-quarter GDP data on Aug. 31 and, according to a Reuters poll, it is likely to have contracted 20% over April-June. It is forecast to shrink 5.1% in the year to March 2021, the weakest since 1979.

Nearly half of India’s 1.38 billion population rely on agriculture to survive, with the sector accounting for 15% of its economic output.

Modi has been citing higher fertiliser demand and sowing of monsoon crops, both key signs of rural activity, to show there are “green shoots” in the economy.

But four government officials said the uptick in activity may not be as large as believed given a spike in virus cases in rural areas that were initially isolated from the pandemic.

“The economic situation has in fact worsened since April and May, and we are likely moving towards a longer economic slowdown than earlier expected,” a finance ministry official said.

The official pointed to sluggish consumer demand and a slowdown in rural lending as causes for concern.

“The situation on the economy front is very serious and the government’s hands are tied on the fiscal front,” a government adviser with direct knowledge of India’s budget plans said.

Both declined to be named as they were not authorised to speak to media. A ministry spokesman declined to comment.

‘AT BEST A MITIGATING FACTOR’

A slump in monthly demand for fuel, electricity, steel, consumer durables and auto sales over April-June further highlight the dire state of the economy.

India also has the third-highest number of virus infections in the world at more than 2.7 million, and new cases are increasingly emerging outside major cities, dashing hopes the rural economy will be a buffer against shrinking exports and manufacturing.

“While a recovery in rural activity provides a glimmer of hope, it is at best a mitigating factor,” said Rahul Bajoria, a Barclays economist. Bajoria expects India’s GDP to have contracted 22.2% in the June quarter.

Farmers planted nearly 14% more land between June 1 and July 31 than last year given good monsoon rains, while fertiliser production rose 4.2% in June.

“Even as the momentum coming from the agriculture sector owing to a normal monsoon and robust sowing is a positive, we believe this may not sustain due to surplus labour concerns, along with an increasing proportion of active COVID-19 cases,” said Upasna Bhardwaj, economist at Kotak Mahindra Bank.

Rating agency ICRA believes pent-up demand contributed to some improvement in manufacturing in June and July, and that it may not continue in August due to virus-related lockdowns.

A widening fiscal deficit may also limit India’s ability to provide more stimulus, though Finance Minister Nirmala Sithamaran has promised to take steps for industries like tourism and hospitality.

India’s fiscal deficit hit a record $88.5 billion over April to June, already 83.2% of the target for the whole fiscal year, due to lower tax collections and front-loaded spending.

CENBANK HELP

India’s central bank has frontloaded interest rate cuts, but many feel demand is likely to remain subdued until virus worries subside and the government pumps in more money.

“Flattening of India’s virus curve is critical for a pickup in production. Once the economy unlocks fully, we expect exports to lead to recovery and domestic demand to lag,” said Kapil Gupta, chief economist, Edelweiss Research.

Former central bank Governor Raghuram Rajan has called for greater focus on protecting India’s economic capabilities for a meaningful revival.

“As is the case with most countries in the region, there is bound to be some permanent damage to output, setting recovery back by a few years to return to pre-COVID trend,” said Radhika Rao, a DBS economist.

Tags: coronavirus, economic slowdown, Finance Minister Nirmala Sithamaran, Indian economy, manufacturing, Pratirodh, prime minister narendra modi, Raghuram Rajan, rurual economy

Continue Reading

Previous SC Directs CBI To Probe Sushant Singh Rajput’s Death Case
Next “One In Four Indians Likely Infected With Covid-19”

More Stories

  • Featured

Bilkis Case: Cong Asks If PM Approved Of Guj Govt Decision

5 hours ago Pratirodh Bureau
  • Featured

India Home To 18 Of 20 Cities With Severe Rise In Air Pollution: Study

5 hours ago Pratirodh Bureau
  • Featured

Which Diet Will Help Save Our Planet?

22 hours ago Pratirodh Bureau

Recent Posts

  • Bilkis Case: Cong Asks If PM Approved Of Guj Govt Decision
  • India Home To 18 Of 20 Cities With Severe Rise In Air Pollution: Study
  • Which Diet Will Help Save Our Planet?
  • Bharat Jodo Yatra ‘Badly Needed’ In India: Cong
  • Rushdie, Supporters To Blame For Attack: Iran
  • What Ails Himalayan Wetlands?
  • 11 Life-Term Convicts Released, Bano’s Family Left Surprised
  • Activists Question PM Modi On What’s Done For Women On Ground
  • Afghanistan Marks 1 Year Since Taliban Seizure As Woes Mount
  • Deep Scars To South Asia’s Ecosystems Are A Legacy Of Partition
  • Deforestation In Amazon Hits A Fresh Record
  • ‘Blood On Streets’: Google Execs On Layoffs
  • Climate Change Could Worsen 58% Of Human Infectious Diseases
  • Salman Rushdie On Ventilator, Likely To Lose An Eye: Report
  • Afghan Girls Face Uncertain Future After 1 Year Of No School
  • Laal Singh Chadha: Blowing In The Wind
  • Ukraine ‘Getting Ready For Tragedy’ At Nuclear Power Plant
  • Tikait Warns Of Another Farmer Agitation
  • BJP Finishes Off Its Regional Allies: Pawar
  • Prophet Row: SC Clubs, Transfers All FIRs To Delhi Police

Search

Main Links

  • Home
  • Newswires
  • Politics & Society
  • The New Feudals
  • World View
  • Arts And Aesthetics
  • For The Record
  • About Us

Related Stroy

  • Featured

Bilkis Case: Cong Asks If PM Approved Of Guj Govt Decision

5 hours ago Pratirodh Bureau
  • Featured

India Home To 18 Of 20 Cities With Severe Rise In Air Pollution: Study

5 hours ago Pratirodh Bureau
  • Featured

Which Diet Will Help Save Our Planet?

22 hours ago Pratirodh Bureau
  • Featured

Bharat Jodo Yatra ‘Badly Needed’ In India: Cong

22 hours ago Pratirodh Bureau
  • Featured

Rushdie, Supporters To Blame For Attack: Iran

1 day ago Pratirodh Bureau

Recent Posts

  • Bilkis Case: Cong Asks If PM Approved Of Guj Govt Decision
  • India Home To 18 Of 20 Cities With Severe Rise In Air Pollution: Study
  • Which Diet Will Help Save Our Planet?
  • Bharat Jodo Yatra ‘Badly Needed’ In India: Cong
  • Rushdie, Supporters To Blame For Attack: Iran
Copyright © All rights reserved. | CoverNews by AF themes.