New Delhi: Acknowledging that the Indian economy faces challenges from external front like oil price rise, Finance Minister Arun Jaitley on Monday said that strong macroeconomic fundamentals are utmost essential to ensure a high growth rate.
Addressing the annual general meeting of the Indian Banks’ Association, Jaitley said that foregoing the fundamentals for a momentary surge in growth was not desirable and that growth with fiscal prudence was necessary
The Finance Minister gave an example of the indiscriminate lending by banks in the past that provided funds for the projects, which later debacled and failed to pay back those debts.
Jaitley expressed hope that India could be the fifth largest economy by next year (from the sixth at present) and said the challenges that the country was facing at present were mostly from the external front like volatile oil prices and trade wars. He further emphasised on the role of the banking industry in strengthening the Indian economy as they channelize the capital flow.
In the context bad loans, Jaitley said that the Insolvency and Bankruptcy Code (IBC) had redefined the creditor-lender relationship in India and there is only a need to expedite the process now for better execution.