Consumption Trend
No cause for concern over consumption trend as of now - Nageswaran
This story was originally published at 14:33 IST on 2 September 2024
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--Nageswaran: Food inflation not a cause of concern at this point
--Nageswaran: Private sector capex to pick up in coming quarters
--Nageswaran: No cause for concern over consumption trend as of now
NEW DELHI – There is no cause for concern over the consumption trend as of now, Chief Economic Adviser to the government V. Anantha Nageswaran said today. The economic adviser's comment comes after India's private consumption grew 7.4% in Apr-Jun after hitting a three-year low of 4.0% in 2023-24 (Apr-Mar).
"We need to watch for employment generation, income growth, and consumption trends," Nageswaran told the media on the sidelines of Financing 3.0 Summit, organised by the Confederation of Indian Industry in Mumbai. "But right now there is no cause for concern."
India's GDP growth moderated to 6.7% in Apr-Jun from 7.8% a quarter ago and 8.2% a year ago, according to data released by the National Statistical Office on Friday.
"In the first quarter, we saw a decline in capital formation growth rates, but that was because of elections," Nageswaran said. The capital formation grew 7.5% in Apr-Jun, against 8.5% a year ago.
Going ahead, the government expects the capital expenditure by the private sector as well as that by the government to pick up, the government's top economist said. "The August bulletin of the RBI (Reserve bank of India) shows that the funds raised by the private sector for capex has consistently been increasing. We do see a brighter capital formation prospects in the private sector."
The RBI, in its bulletin released on Aug 19, has estimated a 54% rise in private capital expenditure to 2.45 trln rupees in the current fiscal year. The private sector had spent 1.59 trln rupees in 2023-24 towards creating capital.
The government's capital expenditure has been slow this year due to the Model Code of Conduct, which was enforced on Mar 16 and continued through April and May amid Lok Sabha elections. The capital expenditure fell 17.6% on year to 2.613 trln rupees during Apr-Jul.
On being asked if there are any concerns over food inflation that may go on to affect growth, Nageswaran said, "No, not a concern." India's food inflation fell to 5.42% in July from 9.36% in June. End
Reported by Kshipra Petkar and Sagar Sen
Written by Krity Ambey
Edited by Aditya Sakorkar
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