FM: Though the world economy is quite fragile yet India appears to be much better placed today on the back of improvement in its macro-economic fundamentals;

Government’s measures to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP and on fiscal consolidation in the long run; Chairs the Sixteenth Meeting of the Financial Stability and Development Council (FSDC) held in national capital today.

The Union Finance Minister Shri Arun Jaitley said though the world economy is quite fragile yet India appears to be much better placed today on the back of improvement in its macro-economic fundamentals. The Finance Minister said that the Government’s measures to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP and on fiscal consolidation in the long run. The Finance Minister Shri Jaitley was making his Opening Remarks while chairing the Sixteenth Meeting of the Financial Stability and Development Council (FSDC) here in New Delhi today. The FSDC meeting was attended by all the Financial Regulators and senior officers of the Ministry of Finance and financial sector regulators. Those who attended the today’s Meeting include  Dr. Urjit R. Patel, Governor, RBI; Shri Ashok Lavasa, Finance Secretary, Shri Shaktikanta Das, Secretary, Department of Economic Affairs (DEA), Dr. Hasmukh Adhia, Secretary, Department of Revenue, Ms. Anjuly Chib Duggal, Secretary, Department of Financial Services (DFS), Shri Neeraj Kumar Gupta, Department of Investment and Public Asset Management(DIPAM), Dr. Arvind Subramanian, Chief Economic Adviser (CEA), Shri U.K. Sinha, Chairman, SEBI; Shri T.S. Vijayan, Chairman, IRDAI, Shri Hemant G Contractor, Chairman, PFRDA and other senior officers of the Government of India and financial sector regulators.

On this occasion, the Chief Economic Adviser (CEA) made a presentation on the state of economy. The Council 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. The Council also noted that the Government’s measures to eliminate the parallel economy and black money are expected to have a positive impact both on GDP and on fiscal consolidation in the long run.

The Regulators offered their suggestions/proposals for the upcoming Budget 2017-18, which were deliberated upon by the Council. The Council also reviewed the present status of NPAs in Banks and the measures taken by Government & RBI for dealing with the stressed assets and discussed on further action in this regard.

FSDC discussed about the various initiatives taken by the Government and Regulators for promoting financial inclusion/financial literacy efforts and discussed further measures for promoting the same.

A Brief Report on the activities undertaken by the FSDC Sub-Committee chaired by Governor, RBI was placed before the FSDC. The Council also undertook a comprehensive review of the action taken by members on the decisions taken in earlier meetings of the Council.

The Council also discussed issues pertaining to Fintech, digital innovations and cyber security. The Council took note of the initiatives taken in this regard by the Government and the Regulators and discussed on further steps to be taken.

Financial stability: regulatory coordination and anti black money measures to bolster growth and fiscal consolidation. The Council reviewed macroeconomic conditions and reinforced regulatory coordination to support measures to eliminate the parallel economy and black money, identifying those measures as likely to assist GDP growth and fiscal consolidation. It examined banking sector stress and recovery measures concerning NPAs, reviewed initiatives on financial inclusion, fintech, digital innovation and cyber security, and directed continued inter-regulatory cooperation and follow-up on prior decisions.