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Finance Minister Arun Jaitley on Thursday expressed confidence that recent measures to eliminate the shadow economy and tax evasion will have a positive impact both on GDP and on fiscal consolidation in the long run.
“Though the world economy is quite fragile, India appears to be much better placed today on the back of improvement in its macro-economic fundamentals,” he said at a pre-Budget meeting with the Financial Stability and Development Council (FSDC).
His comments come a day before the Central Statistics Office is expected to release the first advanced estimates of gross domestic product in 2016-17. Private economists and agencies have already downgraded India’s growth projection for the fiscal due to the perceived impact of demonetisation of ₹500 and ₹1,000 currency notes on the economy.
The Finance Minister’s confidence was also backed by the FSDC. “The Council also reviewed the major issues and challenges facing the economy and noted that India appears to be much better placed today on the back of improvement in its macro-economic fundamentals,” said the Finance Ministry in a statement. During the meeting, Chief Economic Adviser Arvind Subramanian made a presentation on the state of economy.
The meeting was attended by all financial sector regulators including Reserve Bank of India Governor Urjit Patel, SEBI Chairman UK Sinha, insurance regulator TS Vijayan and PFRDA chief Hemant Contractor, apart from senior Finance Ministry officials.
NPA status review Apart from offering proposals for the Union Budget 2017-18, the FSDC also reviewed the status of non-performing assets in banks and measures taken by the government and the RBI for dealing with the stressed assets and further action required.
With the government focus on promoting digital payments, the Council also discussed issues relating to financial technology, digital innovations and cyber security as well as measures for promoting financial inclusion and literacy.
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