FSDC takes stock of economy ahead of Budget

The country’s Financial Stability and Development Council (FSDC), which reviewed the economic situation after demonetisation and ahead of the Budget, has put its stamp of approval on the recent move to ban high denomination notes.

Chairing the meeting, Finance Minister Arun Jaitley said the government’s measures to eliminate the shadow economy and tax evasion were expected to have a positive impact both on GDP and on fiscal consolidation in the long run.

The Council reviewed the major issues and challenges facing the economy and said India appeared to be much better placed in the league of world economies with the improvement in its macro-economic fundamentals.

“The Council also noted that the government’s measures to eliminate the parallel economy and black money are expected to have a positive impact both on GDP and on fiscal consolidation in the long run,” an official statement said.

Chief Economic Advisor Arvind Subramanian made a presentation on the state of the economy and other financial sector regulators made their suggestions ahead of the Budget.

Pension Regulatory Fund Chairman Hemant Contractor said he suggested that national pension scheme (NPS) should be tax exempt at all stages to increase pension coverage. At present, it is taxed at maturity. In EPFO and PPF, the maturity amount is not taxed.

Others who attended the meeting included RBI Governor Urjit Patel, Economic Affairs Secretary Shaktikanta Das, Revenue Secretary Hasmukh Adhia, Sebi chief U K Sinha, and IRDAI chief T S Vijayan, among others.