In his first address after surgery, Finance Minister Arun Jaitley slammed Congress, Organization of the Petroleum Exporting Countries (OPEC), and US President Donald Trump -- all in ten minutes, and without taking names.
In his first address after surgery, Finance Minister Arun Jaitley slammed Congress, Organization of the Petroleum Exporting Countries (OPEC), and US President Donald Trump — all in ten minutes, and without taking names. Speaking at the 5th SBI Banking and Economic Conclave, the finance minister reiterated the government’s promise of meeting the fiscal deficit target in the financial year 2018-19.
He summarised that it was India’s strong macroeconomic fundamentals, built in last four years, that helped the government to not take the path of “panic reaction” or “fiscal adventurism”. On banking crisis, he said,”Prior to 2014, there was obviously an attempt to sweep the problem under the carpet, therefore realisation of the problem itself was concealed. You came with restructuring after restructuring… the first challenge really was to recognise the problem.” The government introduced the Insolvency and Bankruptcy Code (IBC) in 2016 to streamline the NPA resolution process.
On economic challenges, Arun Jaitley listed two big challenges in front of the government — both international. He said that there is an artificial scarcity of oil, which is not going to continue for long. “Since the pricing of the oil is about demand and supply, they can’t put a hold on supplies indefinitely. They also need revenues,” he said. OPEC last month agreed on a modest increase in oil production from July to help reduce the price of crude and avoid a supply shortage. Arun Jaitley said that oil volatility is outside of the government’s control.
The other challenge, Arun Jaitley said, was fears of the trade war. “There is consequential impact of trade war on us… We are in an interconnected world, where development in one part of the world impact others. If there’s a war between two countries, and China moderates its currency, it will have a significant impact on Asian economies,” he said, adding that the Rupee will come back to its normal range in a few weeks. He said that since India reaped benefits from an open economy, the government chose the path that rewarded the country over protectionism.