Nirmala Sitharaman discusses macro situation, budget planning
This was Sitharaman’s first such meeting after she took charge as the finance minister.
In a statement, the finance ministry said the current global and domestic economic situation as well as financial stability issues, including, inter alia, those concerning banking and non-banking finance companies (NBFCs), were reviewed. “All the regulators presented their proposals for the Union Budget 2019-20,” the statement said.
This was Sitharaman’s first such meeting after she took charge as the finance minister. FSDC is the apex body of sectoral regulators, including the Reserve Bank of India, headed by the finance minister. The budget will be presented on July 5.
After the meeting, RBI governor Shaktikanta Das said there was a general review of the current state of the economy, of the overall macro-economic situation, and global developments. “There was a discussion on the forthcoming budget and various budget-related suggestions and proposals were discussed,” he added.
Das said RBI has already projected a 7% GDP growth for the current year and that the economic situation has also been spelt out in the Monetary Policy.
“In the post MPC (Monetary Policy Committee) press conference, I have personally elaborated on the risks to global growth. We have also flagged the other issues in the MPC resolution, and in the statement which I made after the MPC. Beyond that I have nothing to add,” he said.
On the liquidity crunch being faced by NBFCs, Das said he would not like to go into the specifics.
When asked if there is a need for the government to give a stimulus package to drive fledgling growth, Das noted that it is for the government to decide, and it is the finance minister's prerogative.
Das noted that the Bimal Jalan Committee, which is looking into the size of capital reserves that the RBI should hold, is likely to submit its final report by June end.
On financial stability being a part of the RBI’s agenda, Das observed that concern on financial stability has been the underlying theme of all monetary policy decisions. “It is not explicitly stated. Should it be explicitly stated, the jury is still out, and a view has to be taken,” he said.