Bhubaneswar / New Delhi, Aug 31 (Mayank Nigam) Notwithstanding the economic slowdown during the April-June quarter, India’s growth story has remained intact, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Saturday. Addressing the national CA conference here, Das stated that the slowing of economic growth to 6.7 percent during the April-June quarter is largely attributed to reduced government spending due to the model code of conduct and elections. The RBI Governor maintained that the growth rate for the current year of 7.2 percent will be achieved as various drivers of GDP, on both the supply and demand sides, demonstrated robust growth during the April-June quarter.
He mentioned that consumption grew by 7.4 percent, investment by 7.5 percent, industry by 7.4 percent, manufacturing by 7 percent, and services by 7.7 percent, while the construction sector witnessed a noteworthy increase of 10.5 percent. The agriculture sector, he noted, had registered a modest growth of 2 percent. Das attributed the primary factor pulling down the overall growth rate to 6.7 percent mainly to the government’s expenditure, which, he said, had recorded a decline of 0.2 percent. However, he remained optimistic that budgeted spending by both the central and state governments will accelerate over the next three quarters to compensate for the shortfall and achieve the projected GDP growth of 7.2 percent for the year. There has been a positive trend in bank credit to industries, which, the RBI Governor said, has grown by 10 percent up to July this year, compared to 4 percent last year. India, Das stated, is making rapid strides in innovation, fintech, and startups, which are potential growth drivers. He added that proactive measures had enabled the country to navigate economic crises in 2008, 2013, and 2019 and acknowledged significant reforms such as the implementation of GST and the Insolvency and Bankruptcy Code.