India's economic growth slowed to a 15-month low of 6.7 per cent in the April-June quarter, largely due to reduced government spending amid the model code of conduct enforced during the recent Lok Sabha elections, according to Reserve Bank of India (RBI) Governor Shaktikanta Das.
The RBI had initially projected a 7.1 per cent growth rate for the period. Das noted that while the Reserve Bank's forecast was 7.1 per cent, the National Statistical Office's first advance estimates showed the actual growth rate at 6.7 per cent.
Das explained that key drivers of GDP growth—consumption, investment, manufacturing, services, and construction—had all registered growth rates exceeding 7 per cent. The slowdown was attributed to lower government expenditure and underwhelming performance in agriculture.
Government spending was notably lower during the first quarter, likely due to the elections and the operation of the model code of conduct by the Election Commission, Das said.
He anticipated an increase in government expenditure in the coming quarters, which should support economic growth.
Agriculture also contributed to the slower growth, with a minimal increase of about 2 per cent in the April-June quarter. Despite this, Das expressed optimism, citing a generally good monsoon across most of India.
Das remained confident that the RBI's projected annual growth rate of 7.2 per cent will be achieved in the subsequent quarters.
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