The Finance Minister is a worried man. He has every reason to be.
Bad news is pouring in from all sides. The Euro zone crisis, the poor industrial growth numbers, and the sharp depreciation of the rupee are just some of the reasons why a scowl has replaced Mr Pranab Mukherjee's usual smile.
Indeed, talking to newspersons on the sidelines of an international conference on ‘Global Cooperation for Sustainable Growth and Development: Views from G20 Countries', Mr Mukherjee said: “A series of bad news is coming.”
But not the one to give up easily, Mr Mukherjee wants a collective effort to overcome these challenges. Though he did not specify what he meant by ‘collective', observers say he is referring to a combination of fiscal and monetary measures.
Addressing the conference, the Finance Minister had stressed the need for strengthening local growth drivers in emerging markets to re-balance the global financial system. He said the rate hikes across emerging economies, aimed at taming inflation, could spur heavy capital inflows, destabilising their exchange rates.
July's industrial growth at a 21-month low was matched by the rupee hitting a 14-month nadir on Monday. Now, there is worry over inflation, with August figures to be released on Wednesday. It was 9.22 per cent in July.
The Government has been saying all efforts will be made to contain the fiscal deficit within the Budget range of 4.6 per cent. The RBI has raised key rate 11 times since March 2010.