NEW DELHI—Prime Minister Narendra Modi has vowed to push ahead with the reforms agenda and increase public spending as part of the drive to strengthen the economy, Union Finance Minister Arun Jaitley told the media on Monday evening in the wake of the stock market crash.
According to Jaitley, PM Modi, who reviewed the crash and the plunge of the rupee during a meeting with him and other top officials, also said the economy was stable and the problem was "external and not internal".
The Finance Minister, who had earlier briefed Modi on the situation, said the government and the regulators were keenly watching global developments but there was no need for a bailout package as of now.
The Prime Minister was of the opinion that "our economy is stable" but more needed to be done, Jaitley said. "We will keep watching the situation and respond when required," he added.
The review of the economy by the Prime Minister came in the backdrop of the benchmark Sensex plunging by 1,624.51 points at 25,741.56 -- its lowest since August 2014. The fall wiped out nearly Rs. 7 lakh crore of the investors' wealth.
The Rupee also fell to 66.64 against the US dollar -- the lowest in 23 months.
The Prime Minister is keen that the present global crisis should be converted into an opportunity for India, Jaitley said.
Earlier in the day, the finance minister termed the market crash as "transient and temporary" and expressed hope that the situation would stabilise as domestic macro-economic indicators were strong.
"There is not a single domestic factor in India which has either contributed or added to it. These are external factors. I have not the least doubt that this turbulence is transient and temporary in nature. Markets will settle down," he said.
Jaitley said that although the downward trend in the stock markets started on August 11 after devaluation of currency by China, "but we were able to hold on at the last till last week...today we have been quite adversely affected.
"Since China has been contributing 50 per cent to global growth in past few years, it is obvious that uncertainty will shake the market."
He further said that but for the impact of currency and stock markets, "all other parameters are in sound footing. Oil and commodity prices are declining which is favourable."
The Minister stressed that growth projection of 8.1 to 8.5 per cent for the current fiscal, even in this global adversity, was going to be broadly maintained.
"Prime Minister was of the opinion in given scenario we can maintain growth figures at reasonable level...in order to further strengthen economy, we should take steps so that world over crisis can be converted to opportunity for India," he said.