Finance Minister Nirmala Sitharaman told the Lok Sabha on Tuesday that the Union Budget for 2025-26 aims to balance national development needs with fiscal priorities. She emphasized that the global landscape has been changed drastically in the past decade, making budget planning more challenging than ever. According to a report, while responding to the budget discussion in the Lok Sabha, Sitharaman also addressed the depreciation of the Indian rupee against the US dollar. She explained that multiple domestic and global factors have contributed to this decline. The minister assured that the government is taking necessary steps to maintain economic stability.
Global Factors Impacted the Budget
In the Lok Sabha, Finance Minister Nirmala Sitharaman stated that global issues like the West Asia crisis, the Russia-Ukraine war, and economic stability concerns have influenced this year’s budget. She highlighted that 99% of government borrowing is being used for capital expenditure, accounting for 4.3% of GDP. The budget focuses on addressing domestic economic challenges while promoting growth, inclusive development, private investment, and supporting middle-class families.
Unemployment Rate Declines
Sitharaman also noted that post-COVID, capital expenditure and resource transfers to states have increased. Responding to opposition concerns, she cited the 2023-24 Labor Force Survey, which shows labor force participation rising from 49% in 2017-18 to over 60% in 2023-24, while unemployment dropped from 6% to 3.4%. Which means the unemployment rates is slightly decreasing gradually.
Controlling Food Inflation a Top Priority
Finance Minister Nirmala Sitharaman emphasized that the government’s primary focus is to control food inflation, closely monitoring various factors affecting prices. She noted that weather conditions and supply chain disruptions are also being tracked. Comparing with the UPA era, she stated that inflation then had crossed double digits, but such a situation does not exist now.
Rupee Depreciation and Global Trends
Responding to concerns over the rupee’s decline, Sitharaman explained that factors like the dollar index, crude oil prices, and the current account deficit influence currency value. She also pointed out that major Asian currencies, including those of South Korea and Malaysia, have weakened.
