On a day when the Sensex tanked over 1500 points and Nifty dipped below the 7,900-level mark by tumbling over 450 points, Finance Minister Arun Jaitley agreed that India is facing multiple challenges emanating from global developments.
Jaitley asserted that the Indian economy is in a revival stage and will be impacted as and when major countries take any measures. "China's devaluation is creating ripples in global markets. Need to strengthen economy to meet global challenges," he said.
Focussing on the need of creating a favourable investor environment, Jaitley said that in a challenging situation, ease of doing business is important. "We have had a series of reforms recently, we have opened up the Indian economy, we have empowered the states more," he said.
Meanwhile, as stocks and rupee hit new lows, Reserve Bank Governor Raghuram Rajan allayed fears citing strong macroeconomic fundamentals of the country which are much better than many others. "I wish to reassure the markets that our macroeconomic factors are under control as the economy is in a much better position relative many other economies," Rajan said.
Rajan said the country has $380 billion in forex reserves to be used as and when the need arises.
The Governor also hinted at lower rates, saying the RBI will look at emerging room for more accommodation on the back of lower commodity prices, astute food management by the government and strong anti-inflation policy stance of the central bank.
"Falling commodity prices and astute food management by the government should help RBI (lower rates)", said Rajan. He also said he sees oil prices remaining at low levels at for a year or two.
Amid free fall in stock markets, the rupee on Monday crashed to 66.49 against the dollar, plunging a whopping 66 paise. The rupee has not seen such a low level in almost two years in opening trade on sustained capital outflows even as the US currency weakened overseas.
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