As government spending remained on the lower side amid the general elections to Lok Sabha, the country’s economic progress slowed down in the first quarter of the current financial year. As per the poll by Reuters, India’s economy grew at the slowest pace in a year at 6.9 per cent in the April to June 2024 quarter. The growth is down from 7.8 per cent in the preceding quarter.
India has been registering a growth rate of above 7 per cent during previous quarters due to the enhanced focus on capital expenditure by the Centre led by Prime Minister Narendra Modi. However, the Centre held back on public expenditure ahead of the general elections which resulted in a slowdown in growth, as per the poll.
As per the poll, the gross domestic product (GDP) was forecast to have witnessed growth at 6.9 per cent in the April to June quarter, marking a decline from the 7.8 per cent growth rate in the January to March 2024 quarter. The data is based on the poll of 52 economists between 19 to 26 August. The overall forecasts stood in the range of 6 per cent to 8.1 per cent.
Even though the capex witnessed a slowdown during the quarter, the growth in private consumption improved from the previous quarter, as stated by the media report. The forecast was such that the growth was expected to settle down, averaging 7 per cent in this financial year and 6.7 per cent in the next fiscal.
The Centre has been putting in efforts to boost consumption through rural spending and the focus on job creation in its first full budget after the election. As per the latest government estimates, the Indian economy is likely to report a growth rate of 6.5 per cent to 7 per cent in the current financial year.
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