India's rural sector has weathered the Covid-19 pandemic, and the demand in the sector is poised to rebound assisted by a wider reopening of the economy and improved labour market conditions, said global investment firm Morgan Stanley.

"High-frequency data suggests that overall economic activity has been normalizing over the past three months after remaining sluggish in the trailing 12 months. Our consolidated rural activity tracker shows a pickup in YoY terms over the last 3-4 months," the investment firm said in a report titled 'Rural India: Recovery Mode On', authored by economists Upasana Chachra and Bani Gambhir.