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

Finance Minister Nirmala Sitharaman said that the lower-than-expected GDP growth in the second quarter was a temporary blip but acknowledged that the July-September was a challenging quarter for the country. India reported a GDP growth of 5.4 per cent in Q2, lower than what was estimated. The Indian economy had grown at 6.7 per cent in the first quarter.

“At 5.4 per cent the Q2 rate is slower than expected. Q2 of this financial year has been a challenging quarter for India and for most of the economies of the world. In the last three years, India's GDP growth rate has averaged 8.3 per cent. It is an outstanding number by global standards,” she said in the Lok Sabha on Tuesday. 

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

"Second quarter growth dip is only a temporary blip; economy will see healthy growth in coming quarters,” said Finance Minister Sitharaman. 

Sitharaman was replying to a debate in the lower house on the first batch of Supplementary Demands for Grants. She said that India continues to be the fastest-growing economy in the world. 

There is no broad-based slowdown in the manufacturing sector, she said, adding that half of the sectors within the overall manufacturing basket continue to remain strong. 

Talking about inflation, Sitharaman 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. 

Unemployment rate has also fallen from 6 per cent in 2017-18 to 3.2 per cent.