Reserve Bank of India (RBI) Governor Shaktikanta Das speaks at the Global Fintech Fest (GFF) 2024, in Mumbai on Friday.
| Photo Credit: ANI
The slowing of India’s economic growth to a 15-month low of 6.7% in the April-June quarter was due to “lower” government spending in the wake of the enforcement of the model code of conduct for the recent Lok Sabha polls, RBI Governor Shaktikanta Das said here on Saturday (August 31, 2024).
The RBI had projected a growth rate of 7.1% for the April-June quarter of this fiscal.
“The Reserve Bank projected a growth rate of 7.1% for the first quarter. However, the first advance estimation data released by the National Statistical Office showed the growth rate at 6.7%,” Mr. Das told reporters here.
The components and main drivers responsible for the GDP growth like consumption, investment, manufacturing, services and construction have registered a growth of more than 7%, he said.
Only two aspects have pulled the growth rate slightly down. Those are—government (both central and state) expenditure and agriculture, the RBI Governor pointed out.
He said the government expenditure was low during the first quarter perhaps due to elections (April to June) and operation of model code of conduct by the Election Commission.
“We would expect the government expenditure to pick up in coming quarters and provide the required support to growth,” Mr. Das said.
Similarly, the agriculture sector has recorded a minimal growth rate of around 2% in the April to June quarter. However, the monsoon was very good and spread all over India except a few areas. So, everyone is optimistic and positive about the agriculture sector, he noted.
“Under these circumstances, we have reasonably confident expectations that the annual growth rate of 7.2% projected by the RBI will be materialized in coming quarters,” the Governor asserted.