New Delhi: Union finance minister Nirmala Sitharaman on Friday said that the gross domestic product or GDP slowdown in the September quarter was not ‘systemic’ and the economic activity in the third quarter, with better public expenditure, is likely to compensate for the moderation. The minister’s statement comes after the Reserve Bank of India sharply slashed its growth projection to 6.6 per cent for the current fiscal from 7.2 per cent earlier.India recorded a 7-quarter low GDP growth of 5.4 per cent in July-September FY25. In the first quarter, the growth was 6.7 per cent. “It is not a systemic slowdown. It is more of absence of activity on public expenditure, capital expenditure and so on. I expect Q3 to make up for all these,” Sitharaman said at an event here. The growth momentum was low in the first quarter due to general election and reduction in capital expenditure. This has had a bearing on the second quarter as well. “We need to push up on many other factors,” she said, adding that India would continue to be the fastest-growing economy next year and thereafter. In the first half, the government spent only 37.3 per cent of its capital expenditure target of Rs 11.11 lakh crore for FY25. “Other factors affecting growth include plateauing global demand that affected export growth,” Sitharaman said, adding that purchasing power of Indians is improving, but within India, you also have concerns of wages saturating. The finance ministry, in its Economic Survey for FY24, had estimated a GDP growth of 6.5-7 per cent for the current fiscal year. “We have a Prime Minister who looks at opportunities in each of the challenges. During Covid-19, the challenge was seen as an opportunity for bringing in reforms. Five mini budgets were presented at that time, each of them giving relief, support and handholding on one hand and on the other making sure that small and overlooked pending reforms were taken,” she said.
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