To revive the investment cycle and boost growth, Finance Minister Arun Jaitley today underlined the need to reduce the cost of doing business and improve the country’s business climate.
Jaitley, in a wide-ranging interaction with financial sector regulators, including RBI governor Raghuram Rajan and Sebi chief U K Sinha, took stock of the prevailing economic condition.
“There is the need to improve business climate and reduce the cost of doing business as important means for revival of the investment cycle,” Jaitley told reporters after the 11th meeting of the Financial Stability and Development Council (FSDC).
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“There were general discussions on the current financial and economic indicators, and also on any suggestions any regulator has with regard to the forthcoming policies of the government,” he added.
The interaction was part of an exercise undertaken by the minister to consult various sectoral regulators ahead of the Budget presentation next month.
India’s economic growth stayed below 5 per cent for the second year in a row at 4.7 per cent in 2013-14, mainly due to a decline in manufacturing and mining output. Growth remained subdued at 4.6 per cent in the fourth quarter of last year.
“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.
Irda Chairman TS Vijayan, Forward Markets Commission Head Ramesh Abhishek and PFRDA’s Officiating Chairman R V Verma, besides senior finance ministry officials including finance secretary Arvind Mayaram, secretary department of financial services G S Sandu, among others were also present.
Reaffirming the government’s commitment to keep finances in check, the Finance Minister said he is against “slackening the vigil in the area of fiscal consolidation”.
Asked about the government’s view on the recently released report on governance of banks by P J Nayak committee, Jaitley said, “You will have to wait for our application of mind on these subjects.”
The Nayak committee has recommended, among other things, bringing down government’s holding in public sector banks below 51 per cent.
During the meeting all financial regulators presented their suggestions regarding the forthcoming Budget and their views on the next generation financial reforms.
The FSDC also noted the recent improvement in vital macroeconomic parameters such as narrowing of fiscal deficit, reduction in the current account deficit and increase in forex reserves.
However, there is a long way to go in terms of reviving economic growth, controlling inflation, keeping deficit under control and addressing infrastructure bottlenecks, it felt.
The Finance Minister will interact with institutional investors and overseas investors later in the evening.