Finance minister Arun Jaitley said on Tuesday the impact of the global turmoil will be lesser on India as its fundamentals are reasonably strong, but the government needs to take steps to strengthen the economy.
Jaitley was briefing the media after the high-level meeting between Prime Minister Narendra Modi and the country's top industrialists, bankers and economists at his 7, Race Course Road residence about how India can manage global economic turbulence.
"Most participants felt that we are going through a phase of volatility which might turn to some turmoil on the market.
Volatility is the norm of the moment and will result in turmoil in the markets and rupee," Jaitley told reporters.
"By and large, a major crux of the entire discussion was that in terms of its economy India is relatively untouched. It was suggested that we should take steps to strengthen India's economy," he said.
The meeting in New Delhi was attended by tycoons including the country's richest man, Mukesh Ambani, Jaitley, Reserve Bank of India governor Raghuram Rajan, economists and state and private bank chiefs.
In the three-hour meeting, participants suggested the government should focus on agriculture, food processing, and creation of infrastructure to fortify the domestic economy against the current global turmoil.
The Prime Minister, who spoke after 27 participants had put their views forward, laid emphasis on creating jobs through micro, small, and medium enterprises. He also agreed with a participant that the rural job creation scheme – MGNREGA – could be used as a tool to develop skills.
Two other indicators for the way ahead were an emphasis on the new economy and importance of the MUDRA Bank to strengthen the unorganised sector, according to Jaitley.
"A good agriculture improves the purchasing power of a large number of people," said Jaitley.
The minister said issues of ease of doing business, cost of labour and capital and stalled projects were also raised by participants at the meeting. They specifically emphasised on two steps - bankruptcy code and a definition of corruption under the prevention of corruption act.
On both, said Jaitley, the government was already in advanced stages.
Most participants said a large number of taxation issues had been resolved, though the remaining reforms had to be carried out. Many of them wanted monetary policy easing by RBI, the minister said.