Some improvement in agriculture, but clear recovery not in sight yet

A few data points show improvement, but their sustainability, and recovery in other major economic indicators is vital

At a time when rising concerns over coronavirus have impacted Indian equity markets, a few recent data points indicate a revival in rural sentiment. One such was the Central Statistics Office’s gross domestic product or GDP print for the December 2019 quarter, which showed good improvement in agricultural activities, mainly aided by inflation. Another was domestic tractor sales of major players were up 16-21 per cent year-on-year in February.

Though these data points offer some comfort, given the importance of rural-led consumption for India’s economy and its equity market, it would be early to conclude that rural consumption has bottomed