Better monsoon and foodgrain output will help ease the price situation, Finance Minister Arun Jaitley said on Tuesday even as he listed performance of PSU banks, stalled projects and private sector investments as challenges.
The meeting of the Financial Stability Development Council (FSDC), chaired by Jaitley, also decided that India will not let guards down on preparedness to deal with external sector vulnerabilities including those arising from Brexit.
Financial sector regulators, including RBI Governor Raghuram Rajan and Sebi Chairman U K Sinha, also deliberated on the macro-economic situation and financial developments globally.
Jaitley said the major challenges before the government include strategy to improve the overall performance of public sector banks, to make stalled projects functional and economically viable and to increase private sector investment.
"Due to better spread of monsoon, we are expecting higher production of pulses this year compared to previous years which in turn will substantially ease their prices in the market," Jaitley said as per an official statement issued after the FSDC meeting.
The Council also reviewed the measures taken by the government and the central bank for handling stressed assets and discussed ways to manage the situation.
It called for continuous monitoring of the situation developing from Britain's exit from the European Union as it would take long time for the full scenario to unfold, official sources said.
There should be no complacency on Brexit situation, said the FSDC, which met for the 15th time on Tuesday since its formation in December 2010.
"The Council also discussed issues relating to developing a comprehensive framework for identification of Systematically Important Financial Institutions (SIFIs) across all sub-sectors of financial sector," the statement said.
On the issue of maturity of concessional swaps of 2013 against FCNR deposits during September-December 2016, FSDC noted the steps taken by RBI to suitably address the issue and its consequences.