Reserve Bank of India (RBI) Governor Shaktikanta Das has reassured that India's economic growth continues to be robust, even in the face of a recent slowdown in GDP. Speaking at the National CA Conference in Bhubaneswar, Odisha, Das explained that the decline in GDP for the first quarter of FY 2024-25 is mainly due to reduced government spending following recent elections and lower agricultural growth. However, he emphasized that major sectors of the economy are still growing at rates above 7%.
"I want to affirm with humility, sincerity, and confidence that India’s growth story remains strong," stated Governor Das. He attributed the moderation in GDP growth to a single factor—government spending at both central and state levels—which he linked to the election season. Recent data revealed that the Indian economy expanded by 6.7% in real terms during the April-June quarter, a slight slowdown compared to previous quarters, which saw growth consistently over 7%.
Despite this, Das expressed optimism that increased government spending in the coming quarters would help achieve the RBI's projected 7.2% growth for the fiscal year. "I believe that the growth projection of 7.2% for the current year is achievable," he added.
The governor also provided a breakdown of sectoral growth in the first quarter: private consumption grew by 7.4%, investment by 7.5%, industries by 7.4%, manufacturing by 7%, services by 7.7%, and construction saw a significant rise of 10.5%. While agriculture grew by 2%, Das expects this to improve due to favorable monsoon conditions.
Furthermore, Das highlighted India’s progress in innovation, particularly in financial technology (Fintech) and startups, marking it as a key driver of future growth.
RBI Governor Shaktikanta Das re-elected as top banker
PM Modi Announces Removal of Angel Tax and New Policies to Boost Fintech Sector
Modi Govt Approves Development of 12 Smart Industrial Cities, Including South's Palakkad