 "India’s Growth Dips to 15-Month Low Amid Election Spending Constraints")
India’s economic growth has slowed to 6.7 percent in the April-June quarter, the lowest in 15 months, according to RBI Governor Shaktikanta Das. He attributed this decline mainly to reduced government spending, linked to the recent Lok Sabha elections and the model code of conduct in place. The Reserve Bank had initially projected a growth rate of 7.1 percent for this period. Despite the slowdown, key sectors like consumption, investment, and manufacturing grew over 7 percent, while agriculture saw minimal growth of about 2 percent. Das expressed optimism that government expenditures would rise in the coming quarters, helping to meet the RBI’s annual growth target of 7.2 percent.
RBI Governor Shaktikanta Das recently shared insights into India’s economic slowdown, which dropped to a 15-month low of 6.7 percent during the April-June quarter of 2024. This decline, he explained, was mainly due to lower government spending linked to the Lok Sabha elections held during that period.
The Reserve Bank of India had initially projected a healthier growth rate of 7.1 percent. However, Das noted that while key sectors like consumption, investment, manufacturing, services, and construction all exceeded 7 percent growth, reduced government expenditure and lackluster agricultural performance were significant factors in the downturn.
Das mentioned that with the enforcement of the election model code of conduct, government spending saw a decline, but he remains optimistic about an uptick in government expenditure in the upcoming quarters, which he believes will support recovery in growth.
The agricultural sector also showed modest growth at around 2 percent, despite favorable monsoon conditions across most of India. Overall, Das expressed confidence that the RBI’s projected annual growth rate of 7.2 percent could still be achieved as conditions improve in the following months.
Tags: RBI, Shaktikanta Das, Indian economy, growth rate, government spending, Lok Sabha elections, agriculture.
What is Slow GDP growth?
Slow GDP growth means that the economy is not growing as fast as it should. This can lead to fewer jobs and lower income for people.
Why is the GDP growth slow?
The GDP growth is slow because the government is spending less money on things that help the economy, like roads, schools, and hospitals.
Who mentioned this issue?
RBI Governor Das talked about this issue, saying it is a concern for the economy.
What does MCC stand for?
MCC stands for Monetary Policy Committee, which helps decide how to manage the economy and interest rates.
What can be done to improve GDP growth?
To improve GDP growth, the government could increase its spending or invest more in projects that create jobs and boost the economy.
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