New Delhi: Union finance minister Nirmala Sitharaman on Tuesday said the lower-than-expected gross domestic product (GDP) growth of 5.4 per cent in the second quarter was a ‘temporary blip’ and the economy will see healthy growth in the coming quarters. She further said that India continues to be the fastest-growing major economy in the world as the country has seen ‘steady and sustained’ growth. She was replying to a debate in the Lok Sabha on the first batch of supplementary demands for grants for 2024-25.
India’s GDP grew at 5.4 per cent in the second quarter of the financial year, which was lower than estimated. This marks a significant decline from the 6.7 per cent growth reported in the first quarter. Amid uproar in the House by Opposition members for the declining economy, the finance minister, however, in her reply highlighted the challenges faced during Q2, but maintained a positive outlook for the upcoming quarters. “India’s GDP growth rate has averaged 8.3 per cent in the last three years and it (5.4 per cent) is an outstanding number by global standards,” she said.
On manufacturing output growth, the finance minister further said there is no broad-based slowdown in the manufacturing sector and half of the sectors within the overall manufacturing basket continue to remain strong. Talking about inflation, Sitharaman also said it is better-controlled than during the UPA government, when it had touched double digits. “Retail inflation in April-October 2024-25 stood at 4.8 per cent, the lowest since the Covid pandemic,” she said, adding, “this shows that prices are under control despite global challenges, which include rising oil prices and disruptions in supply chains.
The finance minister also spoke about the improvement in employment levels in recent years. “The unemployment rate in the country has fallen. The rate, which was 6 per cent in 2017-18, has now come down to 3.2 per cent. “This is a sign of the economy’s recovery and growth, as more jobs are being created across various sectors,” she said.
Later, the Lok Sabha passed supplementary demands for grants, seeking approval of additional net expenditure of Rs 44,143 crore in the current fiscal, mainly on account of higher spending by agriculture, fertiliser and defence ministries. The first batch of supplementary demands for grants for 2024-25 sought approval to authorise gross additional expenditure of Rs 87,762.56 crore.
Of this, proposals involving net cash outgo aggregate to Rs 44,142.87 crore and gross additional expenditure, matched by savings of the ministries/departments or enhanced receipts/recoveries, aggregates to Rs 43,618.43 crore. The additional spending includes Rs 6,593.73 crore towards the fertiliser subsidy scheme, about Rs 9,000 crore for agriculture and farmer welfare, and Rs 8,000 crore towards defence spending.
