Fall in Q1 GDP numbers is because of elections code and restricted govt expenditure: RBI Governor

Bhubaneswar: After the release of the first quarter GDP numbers, RBI Governor Shaktikanta Das on Saturday stated that India's growth story is intact. The governor was speaking at the National CA Conference in Bhubaneswar, Odisha.
He also highlighted that the fall in the GDP numbers is only because of a reduction in the government spending due to the recently concluded elections which restricted the government spending and the low growth in the agriculture sector. He shared that the growth of all other major sectors is above 7 per cent.
"I would like to say with all humility and sincerity and with all confidence that the Indian growth story is intact," said the Governor. Highlighting the reason for moderation in growth numbers he said "It's one component which has pulled down the growth, its government expenditure, both central and state government expenditure, perhaps due to the election season".
According to the Ministry of Statistics and Programme Implementation's official data released on Friday, the Indian economy grew by 6.7 per cent in real terms in the April-June quarter of the current financial year 2024-25. This represents a slowdown compared to the preceding four quarters, where the economy consistently grew by over 7 per cent.
The Governor also showed confidence that in the coming quarters when the government spending will increase the RBI will be able to achieve the target of 7.2 per cent growth projection for this fiscal year.
"I think going ahead I would like to believe that whatever growth projection we have given for the current year of 7.2 per cent should happen should materialize" added Das.
Highlighting the growth in the different sectors of the economy Das stated that in the first quarter April to June, private consumption grew by 7.4 per cent against 4 per cent in the fourth quarter of last year.
He also added that in the first quarter, investment has grown by 7.5 per cent, industries have grown by 7.4 per cent, manufacturing has grown by 7 per cent, services sector has grown by 7.7 per cent, and the construction sector has grown by 10.5 per cent.
For the agriculture sector, the governor highlighted that it grew by 2 per cent in the first quarter, but now after the good monsoon the growth may pick up as the country received good rainfall this year which will help in increasing the agricultural growth this year.
Das said "The agriculture sector in the first quarter has grown by 2 per cent but thanks to the monsoon being very good this year and monsoon initially made a slightly late start. But it has really now covered large parts of the country excepting few parts in eastern India."
The governor also noted that India is making great strides in two areas of innovation which include adopting financial technology that is in Fintech and in startups.