The new finance minister Arun Jaitley and RBI governor Raghuram Rajan today promised to work towards promoting economic growth while at the same time containing price rise, restoring investor confidence and keeping fiscal deficit under check.
Jaitley, who also handles the defence and corporate affairs portfolios, said, ''the challenges are very obvious. We have to restore back the pace of growth, contain inflation, and obviously concentrate on fiscal consolidation itself.''
Rajan, who called on the new finance minister Arun Jaitley for the customary meeting with the finance minister ahead of the RBI's policy review, said both the government and the central bank are engaged in curbing inflation.
"It (curbing inflation) is absolutely a task that the government and the RBI are engaged with," Rajan said after the meeting, which lasted for about 50 minutes.
"RBI has always maintained the balance between growth and inflation," Rajan said, adding that the central bank would continue to do so.
The RBI governor said it was the high inflation rate that forced RBI to keep policy rates high.
RBI, which is slated to come out with its monetary policy review on 3 June, is widely expected to keep policy rates unchanged.
Jaitley, who was talking to reporters soon after taking charge of the finance ministry, said the government has to be watchful of the current account deficit (CAD) as well as the rupee value amidst global market volatility.
India's current account deficit, however, eased to 0.2 per cent of GDP in the last quarter of the previous financial year as gold imports fell following restrictions imposed by the government and the RBI.
Jaitley said the defence portfolio was additional charge and that he would be looking after the portfolio for only a short while, until the full council of ministers takes shape.
''For a transient phase, I will be looking after ministry of defence also, but that's only an additional charge till there's an expansion in cabinet itself,'' he added.
Jaitley said he was conscious of the challenges facing the economy and the hope that people have bestowed on the new government. This itself is enough to send a strong signal to the global community and the domestic investor, he said.
Jaitley said the new government would spell out its policy stance over the next few days. ''I think over the next two months by expediting decision making processes we will be able to build on that.''
''You will have to wait for a few days before we spell out the entire policy of the new government,'' he said.
India's economic growth rate that has slipped from levels around 9 per cent before the 2008 global financial meltdown to decade's low of 4.5 per cent in 2012-13, increased slightly to 4.9 per cent in 2013-114.
In the current fiscal, the GDP growth rate is expected to rise further to 5.5 per cent.