It was felt that before going ahead with any more reforms, a process of consolidation should be carried out in the reforms already announced
Amid concerns over the impact of the continued fall in rupee , Finance Minister P. Chidambaram, on Tuesday, held parleys with Prime Minister’s Economic Advisor C. Rangarajan and Deputy Chairman, Planning Commission, Montek Singh Ahluwalia to discuss the grim situation.
Earlier, on Monday, Mr. Chidambaram held a review meeting with senior officials of the Finance Ministry and was understood to have told them to prepare a thee-month roadmap for fiscal consolidation. Notwithstanding the continued assertion by experts and the government that the economic situation was not bad and the businesses should not panic, the rupee showed no signs of major recovery on Tuesday.
During his meeting with Dr. Rangarajan and Mr. Ahluwalia, the Finance Minister is understood to have discussed the current economic situation and the challenges arising out of the sudden decline in the value of rupee and its impact on the stock market.
“The fundamentals of the economy are strong and the foreign exchange reserves stand at $290 billion. There is no possibility of repeat of 1991 when the forex stood at a mere $3 billion. Hopefully things will improve in the coming days,” a senior official said.
The meeting, also attended by Economic Affairs Secretary Arvind Mayaram and Commerce Secretary S. R. Rao, was also used to discuss the strategy for the upcoming G20 Leaders’ Summit at St Petersburg early next month. It was felt that before going ahead with any kind of reforms in the coming weeks, it was important that a process of consolidation was carried out in the reforms and measures already announced to attract investment and revive sentiment.