Finance Minister Nirmala Sitharaman addressed concerns in the Lok Sabha over the recent slowdown in India's GDP growth during the second quarter of FY 2025, assuring that the dip is a "temporary blip" and growth is expected to rebound in the coming quarters.
Speaking during the discussion on the Supplementary Demands for Grants - First Batch 2024-25, Sitharaman urged stakeholders to consider the broader context of the slowdown.
"Let us not pick on the one GDP drop. This year, government expenditure began effectively in August, and between September and October, there was a downward bias for Q2 GDP growth. Such situations are not uncommon during Lok Sabha election years," she said.
Manufacturing and Capex Growth
The Finance Minister dismissed concerns of a broader slowdown in manufacturing, noting that the impact has been restricted to a few sectors. She also highlighted encouraging developments in government capital expenditure (Capex), which has grown 6.7% year-on-year, signalling continued investment in infrastructure and economic development.
"With these positive trends, the economy is on track for improved performance in the upcoming quarters," Sitharaman added.
Inflation Under Control
Addressing inflation, Sitharaman highlighted that India's retail inflation has been significantly reduced to an average of 5.1% between 2014-2024, compared to double-digit inflation during the previous Congress-led government. She reassured the House that the government remains focused on managing food inflation, which has faced weather-induced volatility.
Retail inflation eased to 5.5% in November, down from 6.2% in October, with food inflation reducing from 10.9% to 9% over the same period.
Optimism for Economic Recovery
Despite the Q2 dip, Sitharaman expressed confidence in India's economic resilience, supported by ongoing government initiatives, infrastructure investments, and stable inflation management. Stakeholders are now looking forward to an economic uptick in the remaining quarters of FY 2025.
CAclubindia
