Q1 bump tied to polls, confident GDP growth will hit 7.2%: RBI governor – Times of India

BHUBANESWAR: RBI governor Shaktikanta Das expressed confidence Saturday that GDP growth rate would meet the central bank’s projected 7.2% in the current financial year, driven by a monsoon-induced farm fillip and an uptick in govt spending that had been dampened by election-related causes in the first quarter.
Das attributed the slower growth of 6.7% in first quarter to lower govt expenditure during the April-June polls.”RBI’s projection of growth rate for the first quarter of the current fiscal was 7.1%. However, as per National Statistical Office, the growth is at 6.7%. But if we see components of GDP or the main driver of GDP growth, whether it’s investment or consumption or supply side like manufacturing or construction, I think, in all sectors growth is 7% in first quarter,” the RBI governor said.
Speaking on sidelines of National CA Conference-2024 organised by ICAI, Das explained factors behind dip in govt spending. “Govt expenditure of both central and state govts was lower in first quarter, perhaps due to polls and MCC. Going forward, we would expect govt expenditure to grow and provide support to (GDP) growth,” said Das, who is on a visit to his home state Odisha.
Propelled by a good monsoon, Das hoped the growth would touch RBI’s projected 7.2%. “Agriculture grew at 2% and from July onwards, the monsoon has been good so far,” he added. The RBI chief also spoke about the fast-growing UPI system, noting its adoption even by other countries.