In the wake of the latest rupee depreciation, Union Finance Minister Arun Jaitley on Friday held a meeting with Prime Minister Narendra Modi where they took ‘stock of the economy’. The issue of expanding Current Account Deficit (CAD) was discussed and the government has decided to take necessary steps to impose restrictions on non-essential imports.
Jaitley confirmed that RBI chief Urjit Patel, who was also present at the meeting along with the RBI deputy governor, officials of Prime Minister’s Office and finance ministry in attendance, gave a presentation to the Prime Minister. “The RBI governor gave a detailed presentation about the condition of world’s economy and external factors which can affect Indian economy,” Jaitley was quoted as saying by ANI.
Although the finance minister said the government would take steps to promote exporters and restrict non-essential imports, he did not specify the items on which the restrictions would be imposed. “The commodities of which imports will be cut down will be decided after consultations with concerned ministries and will be WTO-compliant,” he added.
Jaitley pointed out that India’s growth rate is higher in comparison to other countries. “Our growth rate as compared to other countries of the world is quite high. Inflation in our country stays in a range and that range is moderate. Mandatory hedging conditions for infrastructure loans will be reviewed to permit manufacturing sector entities to avail external commercial borrowing upto 50 million with a minimum maturity of 1 year,” he said.
“Removal of exposure limit of 20% of Foreign portfolio investment (FPI) corporate bonds portfolio to a single corporate group will be reviewed,” he added.
On September 12, the rupee plunged to an all-time low of 72.91 against the US dollar, while the prices of Petrol and diesel have touched record highs. Since August, the domestic currency has declined around 6 per cent.