We have achieved macro stability to large extent but the growth moderation in the

global economy and policy uncertainties among advanced countries pose risk to this outlook.

The Union Finance Minister Shri Arun Jaitley said India has emerged among the few large economies in the world with a promising economic outlook. He said that the economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root. He said that we have achieved macro stability to large extent but the growth moderation in the global economy and policy uncertainties among advanced countries pose risk to this outlook.

The Finance Minister was making the Opening Remarks during the 14th Financial Stability and Development Council (FSDC) Meeting with the Financial Sector Regulators here yesterday. FSDC Meeting was being held as part of the Finance Minister’s Pre-Budget Consultative process. The Finance Minister further said that FSDC has functioned in an effective and smooth manner in terms of achieving its twin objectives of ensuring financial stability while pursuing financial sector development in close coordination with all Members. He appreciated the efforts of each member in terms of pushing the financial reforms agenda and policies as also strengthening rules and regulations. 

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Earlier, the Chief Economic Adviser Dr. Arvind Subramanian made a presentation on the state of economy. The Council reviewed the major issues and challenges facing the economy. Subsequent to this, the Regulators had offered their suggestions/ proposals for the upcoming Budget 2016-17, which were deliberated upon by the Council.

Many suggestions made during the aforesaid meeting with regard to the forthcoming Union Budget 2016-17 include to continue to follow-up  the path of fiscal consolidation along with quality spending of the public investment in order to achieve the higher rate of growth. Other suggestions include sufficient provision of funds in the forthcoming budget for recapitalization of banks in order to clean-up their balance sheets and exemption from service tax to life insurance premium. Other suggestions include continuation of the Government’s contribution in the premium for Atal Pension Yojana (APY) for another year and exemption from tax at time of final withdrawal under NPS at par with PPF and EPF among others.

  The Finance Minister Shri Jaitley appreciated the valuable suggestions made in the meeting for the Budget 2016-17 and for overall financial sector development.

The Fourteenth Meeting of the Financial Stability and Development Council (FSDC) held under the Chairmanship of the Union Minister of Finance, Shri Arun Jaitley was attended among others by Shri Jayant Sinha, Minister of State (Finance), Dr. Raghuram G. Rajan, Governor, RBI; Shri Ratan P Watal, Finance Secretary; Shri Shaktikanta Das, Secretary, Department of Economic Affairs; Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Department of Financial Services; Shri Neeraj Kumar Gupta, Secretary,Department of Disinvestment; Dr. Arvind Subramanian, Chief Economic Adviser (CEA); Shri U.K.Sinha, Chairman, SEBI; Shri T. Vijayan, Chairman, IRDA; Shri Hemant G Contractor, Chairman, PPRDA and other senior officers of the Government of India, and financial sector regulators.

Fiscal consolidation prioritized with targeted public investment, bank recapitalisation and tax exemptions proposed to strengthen financial stability. The Finance Minister reported a promising economic outlook tempered by global risks and highlighted the FSDC's coordinating role in financial stability and sector development. Regulators' budget proposals included continuing fiscal consolidation with quality public investment, provisioning for bank recapitalisation, exemption of service tax on life insurance premiums, continuation of Government contribution to Atal Pension Yojana, and tax parity for final NPS withdrawals with PPF and EPF.