RBI Governor Affirms India's Growth Amid GDP Slowdown

RBI Governor Shaktikanta Das reassured that India's growth remains robust despite the first quarter GDP drop. Speaking at a National CA Conference, he attributed the slowdown to reduced government spending and low agricultural growth. He remains optimistic about achieving a 7.2% growth projection for 2024-25.

After the release of the first quarter GDP numbers, Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday affirmed that India's growth story remains robust. Das addressed the National CA Conference in Bhubaneswar, Odisha, attributing the decline in GDP figures primarily to reduced government spending following recent elections and low agricultural growth. He pointed out that major sectors are growing above 7%.

"I would like to say with all humility, sincerity, and confidence that the Indian growth story is intact," declared Governor Das. Highlighting the reasons behind the moderation, he added, "It's one component that has pulled down the growth—government expenditure, both central and state, perhaps due to the election season." Data from the Ministry of Statistics and Programme Implementation showed that the Indian economy expanded by 6.7% in real terms during the April-June quarter of FY 2024-25, marking a slowdown compared to previous quarters where it consistently grew over 7%.

Das expressed confidence that increased government spending in upcoming quarters would help achieve the RBI's 7.2% growth projection for the fiscal year. "I believe that the growth projection of 7.2% for the current year should materialize," he added.

Das outlined sector-specific growth statistics for the first quarter: private consumption rose by 7.4%, investment by 7.5%, industries by 7.4%, manufacturing by 7%, services by 7.7%, and construction surged by 10.5%. In terms of agriculture, he acknowledged a 2% growth but anticipated improvement due to favorable monsoon conditions.

The governor also emphasized India's advancements in innovation, particularly in financial technology (Fintech) and startups.

(With inputs from agencies.)