New Delhi, Feb 11 (UNI) Stating that Indian rupee has remained stable while dollar has been strengthening, Finance Minister Nirmala Sitharaman on Tuesday said that social sector spending for the next fiscal is projected to rise and inflation management remains the government’s key priority.
Replying to the general discussion on Union Budget 2025-26 in Lok Sabha, the Minister said that 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 and current account deficits, among others.
“Currency volatility across major countries is really extensive. The US dollar index rose 6.5% during October 2024 to January 2025. Major Asian currencies such as South Korean Won , Indonesian Rupiah, Malaysian Ringgit depreciated by 8.1%, 6.4% and 5.9% respectively in this period. G-10 currencies also depreciated during this period by more than 5.5%.
So for instance, Japanese Yen depreciated by 7.0%, British Pound by 6.6% and 5.8% is the Euro,” Sitharaman said, suggesting that the Indian rupee has performed better than many currencies of the world.
The Minister rejected the concerns raised by the Opposition members against weakening of the Indian rupee which dropped to its life-time low of 87.95 against the dollar on February 10, 2025.
Sitharaman highlighted that the government is using almost the entire borrowed resource for financing effective capital expenditure.
“Borrowing is not going for revenue expenditure, committed expenditure, any of those kinds. It is going only for creating capital assets,” she noted.
Effective capital expenditure for FY 2025-26 is pegged at Rs 15.48 lakh crore.
“Capital expenditure outlays have not come down, rather it has gone up,” the Minister said, rejecting some of the Opposition members’ contention that the government had managed to score better on fiscal deficit by cutting expenditure for various welfare programmes.
She noted that effective capital expenditure is 4.3% and the fiscal deficit is 4.4 % of the GDP for 2025-26 indicating that borrowed money is going largely towards creating productive national assets.
Sitharaman also stated that the central government’s debt is progressively coming down and external sector debt is only a small part of it.
“Liabilities of the central government are mostly domestic liabilities in nature with a small portion, 3.4% of the total liabilities at book value, which are external sector debt,” the FM said.
Responding to the accusations by some of the Opposition members that states are not being given money for food security measures, She said that money was lying with the states unused.
