India faces protracted slowdown as virus clouds rural revival

By Swati Bhat and Manoj Kumar

MUMBAI/NEW DELHI (Reuters) – 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

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