FM cautions PSBs to bring down NPA

On the prices front Mukherjee said that it is a major challenge in the short term for the government as well as the Reserve Bank of India (RBI) who have taken measures to bring down inflation to acceptable levels.

“Inflationary pressure has no direction. If we compare developments starting from 2008 to 2010,in the first half of 2008,both commodity prices and oil prices started moving up. Then in the next six months oil prices came down. Further in June 2008,oil prices reached as high as $147 per barrel. In January 2009,it came down to around $55-$56 per barrel. That means it is unpredictable and nobody can comment what that would be the final. Same story is being repeated this year too,” Mukherjee said.

“We are told that there would be some pressure on commodity prices because of the shortage of production of certain food items. Therefore,when there is uncertainty in the global market,particularly on those products for which we have to depend on imports,naturally it would affect (the country). But at the same time,by constantly adjusting the policies,both on the supply-side and the demand-side,and taking the appropriate fiscal policies we are trying to achieve higher growth at acceptable level of inflation,” he added.

The finance minister further said during the year various view points have been expressed about growth. “So we have to closely monitor the growth in different sectors. When the first quarter growth figure will be available to us,then it will be possible for us to assess the growth scenario,” he said.

India is working towards fiscal consolidation to control inflation to bring it to an acceptable level and also to have high growth rate.

On reforms in the financial sector,especially amendments to the PFRDA Act and insurance reforms,the FM said,“After receipt of the report of the Parliamentary standing committee,I am hopeful of the support of other political parties. These two important legislations which were pending for quiet sometime have been placed before the Parliament in the last session.”

According to the finance ministry,the services sector which contributes about 58 per cent of GDP,has become an important stabilizing factor for our economy.

On financial inclusion,Mukherjee said,“The government has also setup two funds with NABARD,namely “Financial Inclusion Fund” for meeting the cost of developmental and promotional interventions of financial inclusion and “Financial Inclusion Technology Fund” for meeting the cost of technology adoption,” he said.