Slowing of GDP growth due to lower govt spending, MCC: RBI Governor
The Hindu
RBI projects 7.1% growth rate for first quarter, citing lower government spending and agriculture sector challenges.
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.