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Responding to a discussion on the Supplementary Demands for Grants – First Batch 2024-25, Sitharaman said that the drop in the GDP growth in the second quarter has to be understood in a “broader context.”
“Let us not pick on the one GDP drop. This year the government expenditure started effectively from August and between September and October, there was a downward bias for Q2 GDP growth. This lower growth situation is no different from the earlier years when Lok Sabha elections were conducted,” Sitharaman said.
The Finance Minister also emphasised that the slowdown in manufacturing growth is not expected to occur, noting that the slowdown has been limited to a few sectors. She also highlighted that government capital expenditure (Capex) has grown by 6.7% year-on-year, indicating continued investment in infrastructure. With these positive developments, she expressed optimism about improved economic performance in the coming quarters.
On inflation, Sitharaman noted that India’s retail inflation had been brought down to 5.1 percent during 2014-2024, after reaching double digits under the previous Congress-led government. She assured that the government remains committed to managing food inflation, which has been affected by weather-driven volatility in certain items. Retail inflation eased to 5.5 percent in November, down from 6.2 percent in October, with food inflation easing to 9 percent from 10.9 percent in the previous month.
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