Soon after taking charge as the country’s Finance Minister, Jaitley pledged to contain price rise, restore confidence of investors in the economy and promote growth while keeping the fiscal deficit under check.

Stating that the country's economy was passing through difficult times, Jaitley said, "The challenges are very obvious. We have to restore back the pace of growth, contain inflation, and obviously concentrate on fiscal consolidation itself."

Referring to his priorities as Finance Minister, Jaitley said, "I am conscious of the fact that I am taking over at a very challenging time particularly when there is a need to rebuild the confidence of the Indian economy. The mandate with which our government has received has an inbuilt hope in it...the political change itself sends a strong signal to the global community as also the domestic investors. I think over the next two months by expediting decision making processes we will be able to build on that."

Jaitley further said the entire policy of the new government would be spelled out in the next few days.

"You will have to wait for a few days before we spell out the entire policy of the new government," he said.
On whether he would focus on inflation at cost of growth, Jaitley said a ‘the balancing act’ will have to done.

Challenges before Jaitley

The biggest challenge before the new Finance Minister will be to revive an economy that is mired in its worst slowdown since the 1980s due to myriad issues such as strained public finances, persistently high inflation, high interest rates and rising bad loans at banks.

Public finances are in dire straits as the government spending has outpaced revenues. The new administration will immediately need to take a decision on slashing subsidies spending, which is threatening a budget blow-out and a sovereign ratings downgrade.

Similarly, Jaitley has to take Asia's third-largest economy out of the clutches of chronic high inflation, which has forced the central bank to keep interest rates high even as growth sags.

Adding to inflationary worries are the prospects of below-average monsoon rains this summer, which could hit farm output and fuel inflation.

Jaitley will need to address the problem of rising bad loans at banks, which have stifled credit flows to corporations.

India had registered over nine percent growth for a few years before the global financial meltdown of 2008 pulled it down. The economic growth rate slipped to decade's low of 4.5 percent in 2012-13. It inched up to 4.9 percent in 2013-14.

In the current fiscal, the growth rate is expected to rise further to 5.5 percent.


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