Sitharaman Attributes Reduced Capital Expenditure for Q2 Slowdown, Believes Q3 to Make Up for the Slump Finance Minister Nirmala Sitharaman addressed concerns about the recent economic slowdown at a recent event saying the slump is only temporary, attributing it to reduced public and capital spend, and added that the third quarter will compensate for the slowdown.
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Finance Minister Nirmala Sitharaman addressed concerns about the recent economic slowdown at a recent event saying the slump is only temporary, attributing it to reduced public and capital spend, and added that the third quarter will compensate for the slowdown.
The country's economy grew only by 5.4 per cent recording a seven-quarter-low. The slowdown followed a 6.7 per cent growth in the first quarter, largely affected by the general capital expenditure. Reports indicate the government has spent only close to 37.3 per cent of its capital expense budget for the financial year so far. The Reserve Bank of India (RBI) also reduced its yearly growth forecast from 7.2 per cent to 6.6 per cent.
"This is not a systemic slowdown and is more because of the absence of activity on public expenditure, capital expenditure, and so on. I expect Q3 to make up for all these," Sitharaman stated.
Sitharaman said that the decreased global demand is affecting exports and potential stagnant wages are impacting consumption domestically. Despite the challenges, the finance minister believes India remains in the race among the fastest-growing economies, highlighting the improved purchasing power within the country.
Sitharaman also emphasized India's role on the global stage, particularly the country's advocacy for the 'Global South'. The finance minister also spoke about strong relationships with countries like Japan, highlighting the influence of people-to-people and business-to-business connections.
