Reserve Bank of India (RBI) governor Shaktikanta Das expects government expenditure to pick up in the second and third quarters, which would boost the GDP growth rate, which had slumped to a five-quarter low of 6.7 per cent the April-June quarter against 8.2 per cent in the year-ago period.
“We would expect the government expenditure to pick up in the coming quarters and provide the required support to growth,” he told reporters in Bhubaneswar on Saturday.
The agriculture sector reported a growth of 2 per cent during the period, which was lower than the 3.7 per cent posted in the same quarter of the previous fiscal. The 6.7 per cent growth was also lower than the RBI’s projection of 7.1 per cent. For 2024-25, the central bank has projected a real GDP growth of 7.2 per cent.
Das on Saturday said while the first advance estimation data released by the National Statistical Office showed the growth rate at 6.7 per cent during the first quarter of this fiscal, the components and main drivers responsible for the GDP growth such as consumption, investment, manufacturing, services and construction have registered a growth of more than 7 per cent.
He added that a good monsoon gives reason for optimism about growth in the sector.
“We have reasonably confident expectations that the annual growth rate of 7.2 per cent projected by the RBI will be materialised in the coming quarters,” Das added.
Economists, however, differ in their views with some saying the real GDP growth for 2024-25 could see some moderation on account of the disappointment in the first quarter.
“RBI projected growth for 2024-25 at 7.2 per cent based on first quarter growth at 7.1 per cent. Now with 6.7 per cent growth in the first quarter, the new annual projection would be 7.1 per cent. We believe GDP growth for 2024-25 will be a tad lower than the RBI’s estimate and 7 per cent growth looks more reasonable,’’ a note from SBI’s economic research department said.
