Bhubaneshwar: Following the release of the first quarter GDP figures, Reserve Bank of India Governor Shaktikanta Das on Saturday asserted that India’s growth story remains intact. The governor was speaking at the CA National Conference in Bhubaneswar, Odisha.
He also stressed that the drop in GDP figures is solely due to a reduction in government spending due to the recently concluded elections that restricted government spending and low growth in the agricultural sector.
The Governor claimed that growth in all other important sectors is above 7 per cent. “I want to say with all humility, sincerity and confidence that India’s growth story is intact,” he said. Highlighting the reason for the moderation in the growth numbers, he said, “It is one component that has reduced growth, its government expenditure, both central and state government expenditure, perhaps due to the election season.”
According to official data from the Ministry of Statistics and Programme Implementation released on Friday, the Indian economy grew by 6.7 per cent in real terms in the April-June quarter of the current fiscal year 2024-25. This represents a slowdown compared to the previous four quarters, when the economy grew consistently by over 7 per cent.
The Governor also expressed confidence that in the coming quarters, when government spending will pick up, the RBI will be able to achieve the projected growth target of 7.2 per cent for this fiscal year.
“I think going forward I would like to believe that whatever growth projection we have given for the current year of 7.2 per cent should materialise,” Das added.
Highlighting the growth of different sectors of the economy, Das said that in the first quarter of April-June, private consumption grew by 7.4 per cent as against 4 per cent in the fourth quarter of last year.
He added that in the first quarter, investment grew by 7.5 percent, industries grew by 7.4 percent, manufacturing grew by 7 percent, the service sector grew by 7.7 percent and the construction sector grew by 10.5 percent.
For the agricultural sector, the governor highlighted that it grew by 2 percent in the first quarter, but now after the good monsoon the growth can pick up as the country received good rains this year, which will help in increasing agricultural growth this year.
Das said, “The agricultural sector in the first quarter has grown by 2 per cent, thanks to the fact that the monsoon has been very good this year and the fact that it started a little late initially. However, it has now covered large parts of the country, except for some areas in eastern India.”
The Governor also noted that India is making great strides in two areas of innovation which include adoption of financial technology in Fintech and startups.
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