Country Finance Minister Nirmala Sitharaman today said on Friday that the slowdown in GDP growth rate in the September quarter is not ‘systemic’ and economic activity with better public expenditure in the third quarter can compensate for this slowdown. In the July-September quarter, the country’s gross domestic product (GDP) grew at the rate of 5.4 percent, the lowest level in seven quarters. At the same time, the growth rate in the April-June quarter was 6.7 percent. Amidst this slowdown, RBI has reduced the growth rate estimate for the current financial year from 7.2 percent to 6.6 percent. “This is not a systemic slowdown. This is due to reduction in public expenditure, capital expenditure and other such activities. I am hopeful that all this will be compensated in the third quarter,” the Finance Minister said at an event.
India will be the fastest growing economy
The Finance Minister said that in such a situation it is not necessary to have a negative impact on the growth rate data. “We need to take into account many other factors as well,” he said. The Finance Minister said that India will remain the fastest growing economy next year and beyond. The pace of growth remained sluggish in the first quarter due to general elections and reduction in capital expenditure. This has affected the second quarter also. In the first half, the government spent only 37.3 percent of its capital expenditure target of Rs 11.11 lakh crore for financial year 2024-25.
Global demand is not increasing
Sitharaman said other factors impacting economic growth include stagnation in global demand, which has impacted export growth. “The purchasing power of Indians is rising, but you also have concerns about wage growth stagnating within India. We are well aware of these factors. These may have an impact on India’s own consumption,” he said.
(With inputs from PTI/Language)
