The lower-than-expected GDP growth of 5.4 per cent in the second quarter is a “temporary blip,” finance minister Nirmala Sitharaman said on Tuesday, expressing optimism that the economy would rebound in the coming quarters.

Replying to a debate in the Lok Sabha on the first batch of supplementary demands for grants, Sitharaman said India’s GDP growth has averaged 8.3 per cent over the last three years, reflecting “steady and sustained” economic performance, which she described as exceptional by global standards. She emphasised that India remains the world’s fastest-growing major economy despite global economic challenges.

India’s GDP growth slowed to 5.4 per cent in the July-September quarter from 6.7 per cent in the April-June period, marking the lowest expansion in seven quarters.

Sitharaman, however, maintained that the slowdown is temporary and the economy remains resilient. “The government believes this is only a temporary blip, and healthy growth will return in the coming quarters,” she said.

The minister, expressing confidence in India’s economic outlook, said “India’s economic fundamentals remain strong, and I am optimistic about an improvement in performance going forward.”

Responding to concerns about the manufacturing sector’s performance, Sitharaman said the slowdown was not widespread. “There is no broad-based slowdown in the manufacturing sector. Half of the sectors within the overall manufacturing basket remain strong,” she stated. The manufacturing sector grew just 2.2 per cent in the second quarter, down sharply from 7 per cent in the first quarter. .

Later the Lok Sabha gave its approval for additional net expenditure of ₹44,143 crore during the current fiscal year. The additional spending includes gross allocations of ₹87,762 crore, partially offset by savings and recoveries of ₹43,618 crore.

Key allocations include ₹6,594 crore for fertiliser subsidies, ₹9,000 crore for agriculture and farmer welfare initiatives and ₹8,000 crore for defence spending.

Sitharaman reiterated the government’s commitment to tackling food inflation, which she said is driven by weather-related volatility in certain food items.