Q2 Growth and Food Inflation Confidence: Finance Minister Nirmala Sitharaman

• Finance Minister Nirmala Sitharaman dismisses concerns about a cyclical growth slowdown and a generalized downturn in India’s manufacturing sector.

• She refers to the disappointing 5.4% Q2 growth numbers as a ‘temporary blip’ caused by various factors, including the conduct of the general elections and the alignment of the festival calendar.

• Sitharaman is optimistic about further easing of food inflation pressures due to an expected increase in Kharif foodgrain output.

• The government is making efforts to build buffers for key food items such as cereals and pulses.

• Sitharaman cites the Centre’s efforts to provide essentials at an affordable price and distribute onions, rice, tur dal, wheat flour, and gram at subsidised prices.

• She argues that core inflation, which excludes volatile food and energy prices, is at a decadal low.

• Sitharaman also notes that India’s real growth rate in this year was 6.7% and 5.4% in the first and second quarters (Q1 and Q2) of 2024-25.

• She believes the trend in Q2 is only a temporary blip and the economy will see healthy growth in the next quarters.

• She also notes that capital expenditure of the Union government has grown by 6.4% between July and October 2024.