GDP growth is set to rebound, slowdown just temporary: FM

FOR THE FIRST TIME, THE UNION BUDGET FOR 2025-26 CONTAINED A NEW STATEMENT THAT SHOWS FUND BALANCE WITH STATE AND UNION TERRITORIES

- Rajeev Jayaswal

NEW DELHI: Slowing economic growth is a temporary phenomenon as the Indian economy is set for a "speedy rebound", and the depreciation in the Indian currency is on account of external factors, finance minister Nirmala Sitharaman said in the Lok Sabha while replying to the debate on Union Budget 2025-26, addressing the two issues raised by several members in the course of the discussion.

"In three years prior to 2024-25, the country's GDP growth rate averaged about 8%. Only in two out of last 12 quarters, [the] growth rate touched 5.4 or remained below it. I want to inform the members that on account of strong economic foundation, a speedy rebound is happening and we shall take measures, which will, going forward, help in keeping our economy growing fastest as before," she added, pointing out that the government's continued emphasis on capital expenditure, and growing private consumption will power growth.

As for the Rupee, it has been stable while the US Dollar has been appreciating, the finance minister explained, providing the rationale for the currency losing around 3.3% compared to dollar between October 2024 and January 2025. To be sure, Opposition parties have always made a big deal of currency depreciation; the BJP, when it was in opposition in the early 2010s, consistently raised the issue of the Rupee weakening against the Dollar.

Various domestic and global factors influence the exchange rate of Indian rupee, such as the movement of Dollar Index, trend in capital flow, level of interest rates, movement in crude prices, current account deficits, etc. So, the currency volatility across major countries is really extensive," Sitharaman said.