India remains in a zone of fiscal and macroeconomic stability: Finance Secretary

With increased spending on food and fertiliser subsidies and refunds of arrears tied to export incentives, Finance Secretary has stated that the Centre will ensure that the fiscal condition remains stable. “We want to make sure that India maintains fiscal and macroeconomic stability while simultaneously meeting the needs of the poor and vulnerable,” he told The Times of India.

The finance secretary also downplayed concerns about the taper tantrum, or the impact of the withdrawal of excess liquidity in developed markets. He claiming that the country’s overall financial situation was considerably better.

We are not in a vulnerable position like we were in 2012-13 because of our large reserves. We have been fiscally conservative in comparison to others, and we are now a positive outlier.

Plus, there are considerably better economic prospects,” Somanathan said, adding that the economy will grow by at least 6-7 percent next year, compared to double-digit growth estimates for this fiscal year.

The government and RBI were keeping a tight eye on the situation earlier this week, but most countries had learned their lessons from the previous taper tantrum, according to the finance minister. The government’s revenue statistics were growing, but there were concerns on the non-tax revenue front, which may indicate a probable shortage in cash coming from the telecom sector, according to a top finance ministry officer.