Macroeconomic stability has improved, says Jaitley

Give focus to spur domestic consumption, suggest economists

Economists at during pre-Budget discussions with Finance Minister Arun Jaitley at the North Block in New Delhi on Tuesday.

Union Finance Minister Arun Jaitley, on Tuesday, said that the Modi government had taken several initiatives for taking the economy on to a higher growth path and that with inflation and external fronts under control, India’s macroeconomic stability has improved.

Growth deceleration has bottomed out and the revival has started as in the first half of the current financial year, growth at 5.5 per cent was higher than the 4.9 per cent in the same period last year, the Finance Minister said, according to an official release. Mr. Jaitley was making the opening remarks at a pre-budget consultative meeting with economists.

The Finance Minister further said that government is committed to fiscal discipline and with sharp decline in international oil prices and due to focused attention from the government, the current account deficit (CAD) is also within the comfort level.

The global economic situation is facing a critical challenge and the government is committed to regaining investor confidence, especially in infrastructure, and for revival of manufacturing, he said.

The economists, in general, expressed their optimism about growth of Indian economy and its capacity to realise its full potential in near future, according to an official release.

The economists recommended that the government give focus to spurring domestic consumption as the global economy is still not showing positive signs of growth except the U.S.

Economists present at the meeting included MIT’s Abhijit Banerjee, Centre of Policy Research’s Partha Mukhopadhyay, MIT’s Esther Duflo, IIM Ahmedabad’s Errol D’Souza, Delhi School of Economics’ Rohini Somanathan, ISI, Delhi’s Chetan Ghate.

Also present were Sabyasachi Kar from the Institute of Economic Growth; R. Nagaraj from IGIDR, Mumbai; Aditya Birla Group Chief Economist Ajit Ranade; Tushar Poddar from Goldman Sachs; Sajjid Chinoy from J.P. Morgan; and Sonal Varma from Nomura.

Minister of State for Finance Jayant Sinha, Finance Secretary Rajiv Mehrishi, Revenue Secretary Shaktikanta Dass, Expenditure Secretary Ratan P. Watal and Disinvestment Secretary Ardhana Johri attended the meeting.

Also, present were Chief Economic Adviser Arvind Subramanian, CBDT Chairperson Anita Kapur and CBEC Chairman Kaushal Srivastava.