Finance Minister Arun Jaitley and his Minister of State Jayant Sinha on Monday said that they were bullish about the prospects and performance of the Indian economy, despite the nation's top bourse registering sharp falls because of what they described as external factors.
Talking to ANI here, Sinha said a short while ago that, " Let the adjustment process move in an orderly way. The rupee continues to be a favored and a strong currency."
"India remains one of strongest economies in world and we have embarked on ambitious reform agenda which is demonstrating good results. It is market forces that set the level of rupee, and our goal is to ensure that it is done in an orderly way," Sinha told ANI further.
"Whether it is currency or asset prices, all of these are going to settle down as they adjust to changes in evaluation across markets, whether it is the Chinese economy slowing down, the possibility of the U.S. Fed raising rates or what we're seeing in terms of commodity prices," said Sinha.
"Volatility is part and parcel of operating these capital markets. We just have to work on these factors. We are in agreement with the finance minister (Arun Jaitley) that it is really external factors that are causing this volatility and turbulence that we are seeing across asset markets, whether it is in fixed incomes, currency or equity markets," the Minister of State for Finance said.
"We are monitoring the situation very carefully, whether it is in our domestic or global markets," he added.
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Earlier, after inaugurating a two-day annual conference of chief commissioners and director generals of Central Board of Excise and Customs here, Finance Minister Arun Jaitley said that India is facing multiple challenges emanating from global developments, but continues to stand by its growth projections made at the beginning of2015.
Jaitley told the participants and later the media outside the venue of the event that he was still hopeful about demand and economic activity increasing in the coming months on back of a reasonable monsoon.
Jaitley said, "India should emerge as one of the fastest growing economies in the world. Now, we have embarked on a path for the past one and a quarter years, that too, even in the midst of a global slow down. The markets will settle down. All concerned authorities, the Government of India and the Reserve Bank of India are watching the situation very closely."
About the top bourses of the country registering sharp falls and the rupee exhibiting unusual volatility against the dollar, Jaitley said, "These are caused by external factors. I have not the least doubt that this turbulence is transient and temporary in nature. There is not a single domestic factor in India which has contributed to this or added to it."
"For the last few days, there has been a great amount of turbulence, which has been caused the global markets to behave differently. Obviously, being a part of globally integrated economy, this would also leave at least some transient impact on India as far as we are concerned," he said.
Jaitley and Sinha were commenting on the after effects of the stock markets going into a free fall across the globe, led by China.
The 30-share Sensex at the Bombay Stock Exchange plummeted a huge 1,077 points, to 26,289 in afternoon trade. At one stage, the Sensex had crashed over 1,200 points, for its biggest intra-day fall in seven-and-a-half years.
Similarly, the National Stock Exchange (Nifty) slumped 339 points, to 7,961 in afternoon trade.
The massive market sell-off wiped-out more than three lakh crore rupees worth of investor wealth. The markets were battered down on intense, across-the-board selling by investors, amid a global sell-off, on worries that the Chinese economy was slowing more than expected.
The Chinese stock market was down a massive 8.5 percent. Other key Asian bourses in Japan, Hong Kong, South Korea and Singapore had slumped between 2.4 percent and 5 percent. European markets in the UK, Germany and France had been beaten down by between 2.4 percent and three percent.
The rupee weakened due to a decrease in domestic equities. Rupee decreased to below the Rs.66 level against the dollar for the first time in almost two years in opening trade today .
However, rupee trimmed its initial losses, and was still down a hefty 59 paise, to 66.42 against the dollar, in late morning deals.
