‘Temporary point’: FM Sitharaman says Q2 was a challenging quarter but economy will see healthy growth

Finance Minister Nirmala Sitharaman said the lower-than-expected GDP growth in the second quarter was a temporary blip, but she acknowledged that the July-September period was a challenging quarter for the country. India recorded GDP growth of 5.4 per cent in the second quarter, lower than expected. The Indian economy grew by 6.7 percent in the first quarter.

“At 5.4 per cent, the second quarter rate is slower than expected. The second quarter of this fiscal has been a challenging quarter for India and most of the world’s economies. In the last three years, India’s GDP growth rate has been 8.3 per cent on average.” “It is a remarkable number by global standards,” she said in the Lok Sabha on Tuesday.

She said: “India has been the fastest growing major economy in the world, and the credit goes to the people and leadership of India.”

“The decline in growth in the second quarter is only a temporary blip; the economy will witness healthy growth in the coming quarters,” Finance Minister Sitharaman said.

Sitharaman was responding to a debate in the House on the first batch of supplementary applications for grants. She said that India remains the fastest growing economy in the world.

She said there is no widespread slowdown in the manufacturing sector, adding that half of the sectors within the overall manufacturing basket remain strong.

Speaking about inflation, Sitharaman said it is better controlled than it was during the United Progressive Alliance government, when it reached double digits. Retail inflation in April-October 2024-25 was 4.8 per cent, the lowest level since the Covid pandemic.

The unemployment rate also decreased from 6 percent in 2017-2018 to 3.2 percent.