Millennium Post

RBI Guv Rajan briefs new FM Jaitley on key financial issues

‘It (curbing inflation) is absolutely a task that the government and the RBI are engaged with,’ Rajan told reporters after the meeting.
Soon after taking charge of the Finance Ministry on Tuesday, Jaitley pledged to contain price rise.Amid RBI maintaining high interest rate regime to tame inflation, Jaitley stressed on the need of a ‘balancing act’ to deal with the declining growth and high inflation.

‘Absolutely, RBI has always maintained the balance between growth and inflation,’ Rajan said, adding that the central bank would continue to do so.A persistent decline in industrial production and a surge in inflation poses big challenge for the new BJP government, led by Prime Minister Narendra Modi, who too assumed office on Tuesday.

On the current account deficit (CAD), which sharply narrowed to 1.7 per cent of GDP in 2013-14, Rajan said ‘Monday's number was very healthy’.
While industrial production shrank for the second month in a row, contracting 0.5 per cent in March, retail inflation surged to a three-month high of 8.59 per cent in April. Industry leaders meanwhile have been clamouring for low interest rates to spur growth. When asked about easing of curbs on gold imports, the Governor said: ‘You will see policies as they are rolled out’.

Meanwhile, Modi regime has decided to club the Ministry of Corporate Affairs (MCA) with the Finance Ministry. ‘There will be clubbing. Currently the (Corporate Affairs) ministry is under me. A notification has to come,’ Finance and Corporate Affairs Minister Arun Jaitley said when asked whether MCA will be part of Finance Minister.

The notification to cluster MCA with Finance Ministry would be issued by the Cabinet Secretariat, he added.Jaitley, who is also the Defence Minister, will be shuttling between the two offices. However, MCA officials will report to him at his office in the Finance Ministry. MCA Secretary Naved Masood briefed Jaitley, who took charge of the Finance Ministry, about the happenings in Corporate Affairs Ministry.The corporate affairs ministry is engaged in implementing the new companies law which seeks to modernise the rules and norms regulating companies in line with the changed global corporate culture.
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