NEW DELHI: The RBI governor Shaktikanta Das on Thursday said that the Indian economy‘s rural demand witnessed a resurgence, as evidenced by the expansion of private consumption and investment in the most recent quarterly GDP figures.
The governor while speaking at FIBAC 2024 said that the latest data from FMCG companies confirms the revival of rural demand.
“Private consumption is the main stay of aggregate demand, with a share of around 56 per cent, that has grown at a rate of 7.4 per cent, in fact it has rebounded from a very feeble 4 per cent growth in the second half of the previous year. This confirms the revival of rural demand, FMCG data shows that the rural demand has picked up,” said Das.
Additionally, Das while speaking latest GDP data said that it demonstrates that the fundamental growth drivers of the Indian economy are gaining strength rather than slowing down.
GDP growth rate for the first quarter of FY25 stood at 6.7%, as per the official data released on Friday by the ministry of statistics and programme implementation.
Das, other than private consumption, which accounts for 56 per cent of GDP, highlighted investment as another crucial driver of growth. Investment, which makes up 35 per cent of GDP, has grown at a rate of 7.5 per cent, in line with recent trends.
The governor said that more than 90 per cent of the GDP expanded as expected, with private consumption and investment showing strong growth. Private consumption accounts for 56% of GDP while investment makes up 35 per cent of GDP.
He attributed the slowdown in GDP numbers to reduced government spending due to elections and the Model Code of Conduct.
“More than 90 per cent of GDP expanded at robust phase and materially above 7 per cent so when we talk about the slowdown to 6.7 per cent in the GDP numbers in the first quarter, we have to take note of this; we should not brush it out,” said Das.
The governor also urged to increase private sector investment. According to the latest data from the Reserve Bank of India (RBI), credit to agriculture and allied activities from banks remained strong, with an 18.1% year-on-year increase. In July of this year, credit to industries grew by 10.2% compared to the previous year. Within the industry sector, credit to Micro, Small, and Medium Enterprises (MSMEs) also experienced a 14.4% year-on-year growth.
“There is an outlook that food inflation could become more favourable during the course of the year. However, we have to remain watchful of how the forces impacting inflation playout,” said Das about food inflation. This positive outlook is supported by the progress of the monsoon season and healthy kharif sowing.
The governor while speaking at FIBAC 2024 said that the latest data from FMCG companies confirms the revival of rural demand.
“Private consumption is the main stay of aggregate demand, with a share of around 56 per cent, that has grown at a rate of 7.4 per cent, in fact it has rebounded from a very feeble 4 per cent growth in the second half of the previous year. This confirms the revival of rural demand, FMCG data shows that the rural demand has picked up,” said Das.
Additionally, Das while speaking latest GDP data said that it demonstrates that the fundamental growth drivers of the Indian economy are gaining strength rather than slowing down.
GDP growth rate for the first quarter of FY25 stood at 6.7%, as per the official data released on Friday by the ministry of statistics and programme implementation.
Das, other than private consumption, which accounts for 56 per cent of GDP, highlighted investment as another crucial driver of growth. Investment, which makes up 35 per cent of GDP, has grown at a rate of 7.5 per cent, in line with recent trends.
The governor said that more than 90 per cent of the GDP expanded as expected, with private consumption and investment showing strong growth. Private consumption accounts for 56% of GDP while investment makes up 35 per cent of GDP.
He attributed the slowdown in GDP numbers to reduced government spending due to elections and the Model Code of Conduct.
“More than 90 per cent of GDP expanded at robust phase and materially above 7 per cent so when we talk about the slowdown to 6.7 per cent in the GDP numbers in the first quarter, we have to take note of this; we should not brush it out,” said Das.
The governor also urged to increase private sector investment. According to the latest data from the Reserve Bank of India (RBI), credit to agriculture and allied activities from banks remained strong, with an 18.1% year-on-year increase. In July of this year, credit to industries grew by 10.2% compared to the previous year. Within the industry sector, credit to Micro, Small, and Medium Enterprises (MSMEs) also experienced a 14.4% year-on-year growth.
“There is an outlook that food inflation could become more favourable during the course of the year. However, we have to remain watchful of how the forces impacting inflation playout,” said Das about food inflation. This positive outlook is supported by the progress of the monsoon season and healthy kharif sowing.