Arun Jaitley meets Raghuram Rajan

The new Finance and Defence minister Arun Jaitley has met Reserve Bank of India Governor Raghuram Rajan on Tuesday and discussed a range of issues.

After the 50-minutes meet Rajan said the RBI has always balanced GDP-inflation and will continue to do so.

“Q4 CAD numbers are very healthy and we will continue to focus on balancing growth and inflation,” Rajan said.

“It (curbing inflation) is absolutely a task that the government and the RBI are engaged with,” Rajan told reporters after the meeting.

Rajan had earlier indicated that the RBI will continue in bringing down consumer price inflation to around 6% by January 2016 and would hike the interest rate. Since Rajan took over as RBI governor in September 2013, the rupee has gained nearly 15%.

Arun Jaitley took charge of the Finance Ministry at a time when India is going through the most critical period in country economy in decade. He will face not only high fiscal deficit and price rise; also he may have to worry of a poor monsoon. Jaitley knows that he needs play a “balancing act” while focusing on fiscal consolidation and inflation.

“The challenges are very obvious. We have to restore back the pace of growth, contain inflation, and obviously concentrate on fiscal consolidation itself,” Jaitley said.

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