Jaitley Prescribes Reforms Pill for India to Face Global Financial Gloom Fallout

Davos: The country can stand out in the gloomy global economic situation with headwinds from China and the US, if it continues with "reforms and responsible economic planning", Finance Minister Arun Jaitley on Friday said, expressing confidence the country will prove its resilience.

Stating that there was a mood of concern among the global leaders and other participants at the World Economic Forum (WEF) Annual Meeting here, Jaitley said India must carry on the structural reforms to once again defy the global slowdown.

"And if India continues its reforms and responsible economic planning, we can stand out.

"Indian economy in 2001, 2008 and 2015 has shown resilience to defy global slowdown and crisis. Today, we are better equipped to face that situation and show the resilience," Jaitley said.

It is absolutely clear in meetings of the global economic leaders in here that "the mood is one of concern because global economy is facing a lot of uncertainty", he said.

"A lot of challenges have surfaced simultaneously. There is worry over China, though Chinese themselves have said that it is no longer possible for China to have a double digit growth and that they consider 7 per cent growth as their new normal. But there is still a lot of global worry about China," he noted.

The Finance Minister said the oil, metals and commodity producing nations were all facing serious challenges and there is a concern that the fourth quarter in the US may not be producing best results.

These issues have led to global uncertainty and that is also leading to re-adjustment of investments, he said.

"Money is being withdrawn from several markets and getting invested elsewhere. Investors are being cautious and averse to risk in an environment of uncertainty.

"So, stock markets across the world have been adversely impacted. They are globally integrated and the currencies in most parts of the world have also been adversely impacted. In fact the impact on currency has been the least in case of India, nonetheless there is an impact," he said.

In the last few days, the Indian rupee has been falling on foreign fund outflows. Touching a 29-month low against the US dollar, it closed at 68.02 on Thursday.