“We have achieved macro stability but growth moderation in the global economy and policy uncertainties among advanced countries pose risk to this outlook,” Jaitley said at the 14th financial stability and development council meeting with financial sector regulators here as part of the pre-budget consultations.
The growth momentum will, however, gather pace after economic and structural reforms take root.
Noting that the council had achieved its twin objectives of ensuring financial stability and financial sector development, Jaitley lauded efforts of its members in pushing the reforms agenda and policies.
Earlier, chief economic adviser Arvind Subramanian presented the state of Indian economy to the council members, who reviewed issues and challenges faced by the economy.
“The regulators suggested to the finance minister to proceed on the path of fiscal consolidation with quality spending of the public investment to achieve higher rate of growth,” the ministry said in a statement.
The members also suggested funds in the 2016-17 budget for recapitalization of banks to clean-up their balance sheets and exempt life insurance premium from service tax.
“The regulators sought continuation of the government’s contribution in the premium for Atal Pension Yojana for another year and tax exemption on final withdrawal of money under the National Postal Savings at par with Public Provident Fund and Employees’ Provident Fund,” the statement added.
Union Minister of State for Finance Jayant Sinha, RBI governor Raghuram Rajan, finance secretary Ratan P. Watal, economic affairs secretary Shaktikanta Das and revenue secretary Hasmukh Adhia attended the meeting along with regulators U.K. Sinha (SEBI), T. Vijayan (IRDA) and Hemant G. Contractor (PPRDA).