RBI Governor Shaktikanta Das
On Friday, June 30, the country’s first quarter GDP figures were released. The GDP figures have fallen to the lowest level in 15 months. Since then, the topic of discussion has remained as to why there was a decline in the country’s growth. After all, what are the reasons whose impact was seen on the country’s GDP? Many experts explain in their own way the reason for the fall in GDP. On Saturday, the governor of the country’s banking regulator, RBI, explained why there was a fall in the country’s GDP.
The RBI Governor had this to say
Giving a briefing on Saturday, Reserve Bank of India (RBI) Governor Shaktikanta Das said India’s economic growth rate will slow in the April-June quarter due to reduced government spending in view of the implementation of the Model Code of Conduct for the recently held Lok Sabha elections. It fell to a 15-month low of 6.7 per cent. The RBI had estimated a growth rate of 7.1 per cent for the April-June quarter of the current financial year.
Das told reporters here that the Reserve Bank had estimated a growth rate of 7.1 per cent for the first quarter. However, in the first preliminary data from the National Statistical Office, the growth rate stood at 6.7 per cent. He said the components and main drivers responsible for GDP growth such as consumption, investment, manufacturing, services and construction have registered growth of over seven per cent.
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Why the country’s GDP
The RBI Governor said that only two areas have slightly reduced the growth rate and they are – government expenditure (both central and state) and agriculture. He said that government expenditure remained low during the first quarter and perhaps this happened due to elections (April-June) and implementation of the Model Code of Conduct. Das said that we are hopeful that government expenditure will pick up in the coming quarters and growth will get the necessary support.
Similarly, the agriculture sector has recorded the lowest growth rate of around two per cent in the April-June quarter. He said that the monsoon has been very good and that is why everyone is optimistic and positive about the agriculture sector. The Governor stressed that under these circumstances, we are confident that the annual growth rate of 7.2 per cent estimated by the RBI will be possible in the coming quarters.
