In the context of the prevailing fuel prices, which are at an all-time high, and with the Rupee depreciating versus the Dollar to an all-time low, Prime Minister Narendra Modi chaired a high-level economy meet on Friday night to gauge and tackle any emergent threats.
The top brass of Prime Minister's Office were present in the meeting, as were members of the Finance Ministry, including Finance Minister Arun Jaitley, and Finance Secretary Hasmukh Adhia, Economic Affairs Secretary Subhash Chandra Garg, as well as RBI Governor Urjit Patel and the central bank's Deputy Governors. Aside from the topic of fuel prices and the Rupee's fluctuating value against the Dollar, many important issues like the increase in current account deficit, which touched 2.4% of GDP in the June quarter, were also discussed.
Addressing the media right after the two-hour meeting, the Finance Minister praised India's ability to be able to tackle the global price rise: "In this meeting, the RBI Governor (Urjit Patel) spoke about the external factors and international situation, which could affect the internal conditions of the Indian economy, and gave a detailed presentation on the same. In comparison to the other countries in the present scenario, our growth rate is significantly higher. In India, inflation is in a range, which is very moderate."
Jaitley did accept, however, that measures, some within the next few days and others, immediately, needed to be taken to tackle the increase in the current account deficit. "The government spoke about keeping the fiscal deficit in check and maintaining it. Regarding the external factors, there have been some decisions taken in the United States because of which the value of Dollar has increased in comparison to other currencies. An area where we should try and improve is the crude oil sector, as well as the Rupee vs Dollar, because of which our current account deficit has increased."
"This is the challenge we have to overcome. There were many suggestions given by everyone, and they will be given thought and conveyed to you (public) in the coming days. But, some issues were such in which introspection needed to be done right away, so that the current account deficit is managed," the senior BJP leader added before announcing five immediate measures to tackle the situation:
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The meeting and the measures announced, which the Economic Affairs Secretary said would have an $8-10 billion impact, were geared more towards aiding the Rupee. The meeting is set to reconvene on Saturday and may discuss the prevailing fuel prices.