New Delhi: At a time when India is going through a period of economic slowdown, Reserve Bank of India Governor Shaktikanta Das said on Friday the government spending has a major role to play in GDP numbers. Addressing an India Today event in Mumbai, Das said that the government spending has been low in the first quarter due to the elections which pulled down the growth numbers to some extent.
He said as the government spending is increasing now, economic growth is expected to be much better in the second quarter of the current financial year. “From the second quarter government expenditure has been picked up. So second-quarter numbers will be hopefully better than the first quarter,” he added.
The statement from the RBI governor comes on a day when Finance Minister Nirmala Sitharaman announced a reduction in corporate tax rates with the objective to give a big boost to companies.
Das said that the RBI analysis clearly indicated that the growth will be at 5.8 per cent and other surveys of the RBI also showed that the growth will be in the range of 5.5-5.8 per cent but the final outcome was much lower.
“When it came in at 5 percent it was a surprise. That is perhaps due to conflicting signals in the economy,” Das added. Das said this weeks after India’s Gross Domestic Product growth dipped to a six-year low of 5 per cent.