|Finance minister Arun Jaitley (left) with RBI governor
Raghuram Rajan in Mumbai on Saturday. (Reuters)
Mumbai, June 7: Union finance minister Arun Jaitley today stressed the need to bring down the cost of doing business even as he sought a co-ordinated approach among regulators to achieve financial stability.
In an interaction with financial sector regulators, including RBI governor Raghuram Rajan and Sebi chief U.K. Sinha, Jaitley took stock of the prevailing economic condition.
IRDA chairman T.S. Vijayan, Forward Markets Commission head Ramesh Abhishek and PFRDA officiating chairman R.V. Verma were the other regulators to attend the meeting. Finance secretary Arvind Mayaram and secretary in the department of financial services G.S. Sandu were also present.
Sources said the meeting was part of the finance ministry’s pre-budget consultations where the regulators gave their inputs for the Union budget due in July.
On Friday, the finance minister had met the captains of industry.
Jaitley today also met key foreign institutional investors on his maiden visit to the financial capital.
“There were general discussions on the current financial and economic indicators, and also on any suggestion any regulator has with regard to the forthcoming policies of the government,” Jaitley told reporters after the 11th meeting of the Financial Stability and Development Council (FSDC).
The FSDC noted the recent improvement in vital macro-economic parameters such as narrowing of the fiscal deficit, reduction in the current account deficit and increase in forex reserves. However, there is a long way to go to revive economic growth, control inflation, keep deficit under control and address infrastructure bottlenecks, it felt.
Jaitley said the country’s investment cycle could be revived by improving the business climate and bringing down the cost of doing business.
Growth stayed below 5 per cent for the second consecutive year at 4.7 per cent in 2013-14 because of a decline in manufacturing and mining output. Growth remained subdued at 4.6 per cent in the fourth quarter of last fiscal.
“There are high political expectations from the new government and the opportunity (is) now available for resolving long-pending problems facing the economy. There is a need for coordinated approach by all the regulators to achieve financial stability,” Jaitley said.
Reaffirming the government’s commitment to keep its fiscal house in order, the finance minister said he was against “slackening the vigil in the area of fiscal consolidation”.
The finance minister indicated that the Centre has not yet given much thought to the PJ Nayak report on governance of banks.
The Nayak committee has recommended bringing down the government’s holding in public sector banks below 51 per cent.