Jaitley said the government will be able to maintain the fiscal deficit target as the fiscal situation should be comfortable next year.
Union Finance Minister Arun Jaitley on Saturday asked markets regulator SEBI to take more steps to deepen the corporate bond market and hoped that the current trend in IPOs would help government meet its disinvestment target.
“I had a meeting with the SEBI board. There is now an increased reliance on the bond market as far as credit is concerned,”Jaitley said. He was addressing the boards of Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI).
They also discussed the financial reforms announced in the Budget 2018-19 in the customary post-Budget meeting held here.
Jaitley said the government will be able to maintain the fiscal deficit target as the fiscal situation should be comfortable next year.
“Next year is going to be reasonably more comfortable as far as revenues are concerned. I am sure we will be able to maintain the target quite well,”Jaitley said.
“You can’t say on the basis of hypothetical situation like oil prices that there would be slippage,” he said, pointing out to the reverse trend in oil prices in the last three days.
On the government’s plan to spend Rs 2.11 lakh crore to recapitalise the public sector banks aimed at restoring banking sector’s health, the minister said, “there are signs that the credit growth is already happening. Now with the recapitalisation of banks, their capacity to lend will increase.”
Jaitley also held extensive discussions on the impact of increased Minimum Support Price (MSP) on commodity prices, farmers and export competitiveness and how to implement it.
Talking to reporters along with the finance minister, RBI Governor Urjit Patel said capital markets have shown substantial growth. “We will have better equity-debt ratio given that entities have been able to raise fair bit of equity. I think that we are already at the credit growth of 11% or so.”
On the current volatility, the RBI Governor said he was aware of the volatility in Indian markets. “It is expected to continue for sometime due to global reasons, but there is no reason to worry,”he added.
Patel pointed out the investors have already turned risk averse. “I think the good thing in this cycle of high equity prices is that almost everyone who has been part of this has talked about a possibility that it can’t go too long,”he added.
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 "Arun Jaitley")
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