Government to ensure India retains fastest-growing economy tag: Highlights from FM Sitharaman's address in Lok Sabha

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on February 11 reaffirmed the government’s commitment to ensuring that India retains its position as the world’s fastest-growing economy. Speaking in the Lok Sabha during discussions on the Union Budget 2025-26, she noted that the country’s 'speedy rebound' from 5.4 percent growth in the second quarter of the current fiscal. She said that the Budget prioritises boosting liquidity while maintaining fiscal discipline, with 99 percent of FY26 borrowings allocated for capital expenditure to drive long-term growth.

FM said, "I am very grateful that members have chosen to get into the details of the Budget. So, suppose there are challenges that have made the Budget preparation with a lot more uncertainties. In that case, I have to at least put in front of the august House, that there are issues which are of global concern, which also have an impact on our own Budget making."

FM also said that the effective capital expenditure is 4.3% & the fiscal deficit is 4.4 % of the GDP for 2025-26. It indicates that govt is using entire borrowed resources for financing effective capital expenditure, creating capital assets.

FM said that inflation management is the highest priority of this government and  overall retail inflation is within the notified tolerance band of 2%-6%. The minister said that food inflation which was impacted by adverse weather conditions or supply chain disruptions has all been attended to, and we are continuing to do it.

"We are taking measures to reduce debt since 2021 and to make public money go for productive asset-building activities," FM added. FM also Sitharaman said that unemployment rate has declined from 6% in 2017-18 to 3.2% in 2023-24.

"Double-digit inflation rates under the earlier UPA regime is a thing of the past now," said Sitharaman.

The FM said that various domestic and global factors influence rupee movement such as movement of dollars index, level of capital flows, level of interest rates, movement in crude prices and that the currency volatility across major countries is really extensive.

FM Sitharaman also said that former RBI Governor Rajan, who even participated in the Bharat Jodo Yatra, acknowledged on Jan 15, 2025, that fixation is always with the rupee-dollar exchange rate, the reality is the dollar has been strengthening against many currencies including the Euro.So it is really a dollar issue.

On net additional expenditure of Rs 2.44 lakh crore is mainly going to finance interest payments, central sector schemes, centrally sponsored schemes, FM said.

FM also targeted the earlier UPA government and said that  UPA era oil, fertilizer and FCI bonds are being repaid now this year and next year. The interest on this itself is RS 3524 crores in FY26, and the principal due is Rs 40,464 crore.

The FM said that unspent balances of 1 lakh crore rupees as on Dec 31, 2024 is lying either in the SNA or escrow accounts of the states for various schemes and  states are asking for more money when unspent balances are lying.

FM Sitharama also said that Rs 1395.45 crore  is lying in SNA, treasury, escrow account in states

Rs 4636.55 crore  is lying in states accounts for food security and  for urban rejuvenation mission- Rs 12377 crore lying in states for AMRUT scheme.

For MGNREGA, Rs 4351 crore lying with states, said Nirmala Sitharaman.