Fiscal disciplining will put economy back on track: FM
Finance Minister Arun Jaitley on Sunday said that fiscal disciplining is required to put the economy of the country back on tracks as India has witnessed two successive years of sub-five per cent growth.
‘At this time, you will require to take some decisions to make sure that the economy is put back on the track,’ Jaitley, who is on a two-day visit to Kashmir for security review meetings as Defence Minister, told reporters here.
The Finance Minister said initial amount of fiscal disciplining will enable India and its people to enjoy fruits of sounder economy at a subsequent stage.
‘But any kind of fiscal indiscipline at this stage will put us in
further doldrums,’ he added. Jaitely said the situation on the economic front was challenging.
‘We had two continuous years of less than 5 per cent growth. You had higher level of inflation. Your tax buoyancy has come down,’ he said.
Asked to elaborate on the steps he intends to take, Jaitley replied: ‘You certainly don't want me to make budget announcement here.’Prime Minister Narendra Modi had on Saturday warned of ‘tough decisions’ over the next couple of years to improve the country's financial health, which he said may not go down well with some sections, and attacked the way the previous UPA government had handled the economy.
‘Taking tough decisions and strong measures in the coming one or two years are needed to bring financial discipline which will restore and boost the country's self-confidence’, he had said addressing BJP workers in Mumbai.
India's economic growth remained below the 5 per cent mark at 4.7 per cent in 2013-14. It remained subdued at 4.6 per cent in the fourth quarter of 2013-14 and during the entire fiscal, mainly due to a decline in manufacturing and mining output.
The country's economy, or gross domestic product (GDP), had expanded at 4.5 per cent in 2012-13, the slowest pace in the previous decade.
Foreign investors pour $4.42 bn in June so far
Foreign investors pumped more than Rs 26,000 crore into the Indian market this month so far primarily on account of positive bias after polls and reform- oriented decisions taken by the new government.
According to the data compiled by securities depositories, net investment by foreign investors into equity markets stood at Rs 10,359 crore, while in debt market it was Rs 15,806 crore — a total of Rs 26,165 crore ($4.42 billion)— this month so far. Market analysts said that foreign investors continued their positive bias towards Indian markets after elections as well primarily on reforms oriented decisions taken by the new government.
Foreign institutional investors, the main drivers of the equity market, have helped in pushing up the benchmark S&P BSE Sensex by over 4 per cent so far this month. Since the beginning of the year, foreign investors made a net investment of Rs 56,163 crore into the country's equities while they put Rs 61,925 crore in debt market in the period, taking the total to Rs 1.18 lakh crore ($19.6 billion).
The strong inflows in the recent months have taken the cumulative net investment of overseas investors into India to $190 billion or well over Rs 9 trillion (Rs 9 lakh crore).
This is based on data from November 1992 onwards, when foreign investors began investing into Indian markets, and includes about $155 billion into equities and about $ 35 billion in debt market.