Finance Minister Nirmala Sitharaman on Saturday highlighted the key thrust areas outlined in the Union Budget and the expectations from the financial sector.
She gave these directions while addressing the central board of directors of the Reserve Bank of India (RBI). The board also reviewed the global and domestic economic situation, and associated challenges, official sources said.
It is customary for the Finance Minister to address RBI's board after the presentation of the Union Budget every year. Complimenting the Finance Minister on the Budget, the RBI board members made a few suggestions for the consideration of the government.
RBI Governor Shaktikanta Das said after the meeting that interest rates have just moved in to positive territory. "Negative interest rates for a long period can create instability.
Our interest rate increase is a part of price stability," Das said while interacting with mediapersons. He was referring to the recent repo rate hike of 25 basis points, which took it to 6.50 per cent.
Das added that the balance of payments situation is eminently manageable, while service exports are doing extremely well. "Remittances have gone up by 27 per cent and merchandise exports are moderating. Achieving an annual target of $400 billion is getting achieved," he said.
On price rise, the RBI Governor said, "If oil prices go down significantly and if there is an advantage of other commodity prices, it will work to our favour in terms of leading to lower inflation.
"Sitharaman was accompanied at the meeting by junior Finance Ministers Bhagwat Karad and Pankaj Choudhary. Finance Secretary T.V. Somanathan, Tuhin Kanta Pandey, Secretary in the Department of Investment and Public Asset Management (DIPAM), and Revenue Secretary Sanjay Malhotra, along with Chief Economic Advisor V. Anantha Nageswaran were also present in the meeting. Economic Affairs Secretary Ajay Seth and Banking Secretary Vivek Joshi were also present.