Lower govt spending due to polls pulled growth down – RBI
MUMBAI: Lower-than-normal government spending due to the poll code has slowed down economic growth to a lower-than-expected 6.7 per cent in the June quarter, said RBI governor Shaktikanta Das on Saturday. This is a 15-month low since the March 2023 quarter when the economy grew at 6.2 per cent. He expressed confidence in the economy meeting the central bank’s forecast for the full year.
On Friday, the first advance estimate by the National Statistical Office showed growth slipped to 6.7 per cent, as most of the sectors led by the critical farm sector slowed down. In the corresponding period of FY24, the gross domestic product had expanded by 8.2 per cent.
The Reserve Bank had projected a 7.1 per cent growth rate for the June quarter.
“Only two aspects have pulled the growth rate slightly down. Those are government (both central and state) expenditure and agriculture,” Das said in Bhubaneswar. He attributed the lower government expenditure to elections which were held from April through June and the resultant model code of conduct put in place by the Election Commission.
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