PM Modi meets Arun Jaitley, Urjit Patel to take stock of economy


Prime Minister Narendra Modi (File Photo)

Prime Minister Narendra Modi (File Photo)

Prime Minister Narendra Modi on Friday began a two-day review of prevailing economic issues including fall in the rupee, rising fuel prices and reforms measures needed to boost growth, official sources said.

Modi met Finance Minister Arun Jaitley, RBI Governor Urjit Patel and other key officials involved in economic policy making. The deliberations will continue tomorrow, the sources said.

Issues facing the economy like depreciation in the rupee and rising fuel prices are being discussed in the meeting.

Measures to boost exports as well as raising interest rate to shore up the rupee, that hit a fresh lifetime low earlier this week, are also being talked about in some quarters.

The meeting comes against the backdrop of the Indian currency falling around 6 per cent since August to touch an all-time low of 72 level this week. Petrol and diesel prices have also touched record highs.

The government has been under pressure from the opposition to stem the rupee fall and cut taxes to check surging fuel prices.

The Finance Ministry has ruled out any cut in taxes to ease the burden on consumers, saying it does not have the bandwidth to lose any revenue without developmental spending being cut. The government can ill-afford this in an election year.

Petrol price Friday climbed to an all-time high of Rs 81.28 per litre in Delhi, while in Mumbai it inched up to Rs 88.67. A litre of diesel in the national capital was priced at Rs 73.30 and Rs 77.82 in Mumbai.

Every Rs 2 cut in the price of petrol and diesel would lead to a revenue loss of around Rs 30,000 crore, as per ministry estimates.

The government has so far maintained that it would not take any knee-jerk action as a response to the fall in rupee or spike in fuel prices.

Data from the Commerce Ministry has shown better than expected trade deficit at USD 17.40 billion in August, down from USD 18.02 billion a month ago. Exports grew 19.21 per cent to USD 27.84 billion while imports rose 25.41 per cent to USD 45.24 billion.

Also, boosting the government was retail inflation rate easing to a 10-month low of 3.69 per cent and wholesale inflation to 4 month low of 4.53 per cent in August.