look news india
New Delhi: India's economic growth slowed to a 15-month low of 6.7 per cent in the April-June quarter due to a cut in government spending in the wake of the implementation of the model code of conduct for the recently held Lok Sabha elections, Reserve Bank of India Governor Shaktikanta Das said.
The RBI had projected a growth rate of 7.1 percent for the April-June quarter of the current financial year. The Reserve Bank had projected a growth rate of 7.1 percent for the first quarter. However, the first advance estimate data of the National Statistical Office has pegged the growth rate at 6.7 percent.
The components and main drivers responsible for GDP growth such as consumption, investment, manufacturing, services and construction recorded a growth of more than seven per cent. The RBI governor said that only two aspects have slightly reduced the growth rate and that is – government (both central and state) spending and agriculture. He said that government spending remained low during the first quarter and this was probably due to the elections (April to June) and the implementation of the code of conduct.
Government spending is expected to increase in the next quarter and provide the necessary support to growth. Similarly, the agriculture sector recorded the lowest growth rate of about two percent in the April to June quarter. The monsoon has been very good and so everyone is optimistic and positive about the agriculture sector.
'Under these circumstances, the Reserve Bank is confident that its projected annual growth rate of 7.2 per cent in the next quarter is possible.'