India's GDP Growth Slows to 15-Month Low: RBI Guv

India's GDP growth slowed to 6.7% in Q1 FY24 due to lower government spending, according to RBI Governor Shaktikanta Das. He attributed the slowdown to the model code of conduct during the Lok Sabha elections.
The RBI had projected a growth rate of 7.1 per cent for the April-June quarter of this fiscal."The Reserve Bank projected a growth rate of 7.1 per cent for the first quarter. However, the first advance estimation data released by the National Statistical Office showed the growth rate at 6.7 per cent," 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 per cent, 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," Das said.

Similarly, the agriculture sector has recorded a minimal growth rate of around 2 per cent 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 per cent projected by the RBI will be materialized in coming quarters," the governor asserted.