Finance ministry expects rural demand to recover as inflation softens

India's headline retail inflation for July came in at a five-month low of 6.71%, helped by easing global commodity prices and lower food prices domestically

Rural demand in India, which was buffeted by the Covid-19 pandemic and then by high global inflation, is set to recover as prices come down and the southwest monsoon proves supportive to the sowing season, the finance ministry said in its latest monthly economic report (MER).

“Kharif sowing supported by the southwest monsoon, coupled with a higher minimum support price for kharif crops, is likely to enhance rural demand. Urban consumption is expected to benefit from the demand for contact-intensive services, improving performance of corporates, and growing optimism of consumers,” stated the MER for July. The report was drafted by the