India to Stay World's Fastest Growing Economy, Says Nirmala Sitharaman

Photo: PTI

On Tuesday, Union Finance Minister Nirmala Sitharaman stated that India will continue to be the world’s fastest-growing economy. She explained that the increase in government spending on infrastructure and the rise in consumption, especially in rural areas, are key reasons behind this growth.

During the Union Budget debate in the Lok Sabha, she highlighted that the government's capital expenditure in the Budget for 2025-26 will be 4.3% of the country's GDP. At the same time, the fiscal deficit stands at 4.4%. She pointed out that all borrowed money is being used for capital investment, which helps in creating valuable assets for the country.

Addressing concerns raised by the opposition, Sitharaman dismissed claims that the government has reduced capital expenditure. She shared official figures, stating that the capital expenditure allocation in the Budget has increased to Rs 1.21 lakh crore, proving that the government's investment in infrastructure and development remains strong.

The Finance Minister also stressed that controlling inflation is a top priority for the government. She assured that overall retail inflation is within the acceptable range of 2% to 6%. She acknowledged that food prices were affected by bad weather but said the government has taken steps to manage the situation and continues to monitor it closely.

Taking a dig at the Congress-led UPA government, Sitharaman pointed out that during its rule, inflation had reached double digits. She reminded the Lok Sabha that food inflation had soared to 11% during the UPA’s second term, causing severe financial stress for the public.

She credited the NDA government for improving the supply chain and supporting agricultural development, which helped bring down food inflation to 5.3% between 2014 and 2024. She also emphasized that the government is keeping a close watch on groundwater levels to ensure that farmers have enough water for their crops. This, she said, helps maintain stable food prices.

Sitharaman further highlighted that the government has strengthened the Food Corporation of India (FCI) by injecting more funds. This move ensures that farmers continue to receive fair prices for their produce under the Minimum Support Price (MSP) scheme.

Refuting claims that the government’s debt burden is rising, Sitharaman explained that the debt-to-GDP ratio has decreased during Prime Minister Modi’s tenure. She stated that the government aims to further reduce it to 50% by 2030-31. She reassured that only 3.4% of the government’s debt is from foreign sources, while 96.6% is borrowed domestically, which reduces financial risks for the country.

Talking about employment, the Finance Minister shared positive news. She said that the unemployment rate has fallen from 6% in 2017-18 to 3.2% in 2023-24.
She also addressed concerns about the Indian rupee weakening against the US dollar. She explained that India is not alone in this situation, as the US dollar has strengthened against many Asian currencies, including those of Indonesia, Japan, and South Korea. Even European currencies have declined against the dollar.

Sitharaman also criticized the previous UPA government, saying that financial burdens from that period still affect today’s economy. She mentioned that bonds issued for oil, fertilizer, and the FCI during the UPA era are now being repaid. The interest alone on these bonds is Rs 3,524 crore for the financial year 2025-26, while the principal amount due is Rs 40,464 crore.

Dismissing claims that the Centre has reduced funds for states, Sitharaman stated that some states have not fully utilized the money already allocated to them. For example, Rs 2,000 crore under the health mission remains unspent.

She revealed that as of December 31, 2024, around Rs 1 lakh crore remains unused in various state accounts meant for different schemes. She questioned why states are demanding more funds when such large amounts are still lying unused.

Breaking down these figures, she explained that Rs 1,395.45 crore is unspent in different state accounts, while Rs 4,636.55 crore is lying unused for food security and urban development projects. Additionally, Rs 12,377 crore meant for the AMRUT scheme is still unspent.

She also pointed out that Rs 4,351 crore allocated for MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is still with the states.
Through her speech, Finance Minister Sitharaman aimed to highlight the government’s commitment to economic growth, responsible financial management, and overall national development.

Feb. 12, 2025 {{ Blogdetails.schedule_date|time }} 332

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