FSDC weighs in on economic headwinds

The Financial Stability and Development Council (FSDC), headed by Finance Minister Arun Jaitley, on Tuesday weighed in on challenges facing the economy, and underscored the need for keeping a constant vigil on them.

The Council, comprising regulators, also took note of the overall stability that has been achieved on the back of improvements in macroeconomic fundamentals, structural reforms with the launch of the goods and services tax, action being taken to address the twin balance sheet challenge, and financial market confidence.

Market confidence by investors are reflected in the high and rising bond and stock valuations, and long-term positive consequences of demonetisation, a finance ministry statement said after the meeting.

“The Council also discussed the issues and challenges facing the Indian economy, and the members agreed to the need to keep constant vigil and be in a state of preparedness of managing any external and internal vulnerabilities,” it said.

Chief Economic Advisor Arvind Subramanian made a presentation on the state of the economy. The meeting was attended by RBI Governor Urjit Patel, Sebi Chairman Ajay Tyagi, Irdai Chairman T S Vijayan, PFRDA Chairman Hemant G Contractor, and secretaries from several ministries.

The Council, in its 17th meeting, also took note of the progress of the Financial Sector Assessment Program for India, jointly conducted by the International Monetary Fund and the World Bank.