Economic Affairs Secretary Shaktikanta Das has said the government and RBI are prepared for all eventualities in case of a possible rate hike by US Federal Reserve. Speaking at a function in New Delhi, Mr Das said US administration will do it in a calibrated and cautious manner so that it doesn’t affect other economies adversely.
US Fed is likely to hike the interest rates which could result in outflow of capital from emerging markets, including India. It has kept benchmark rate at zero percent since the end of 2008 to help the economic recovery. Raising concern on china’s currency volatility, he said India is insulated from them as the country is not a part of China manufacturing value chain.
Mr Das also said the government will achieve overall Budget target of tax collection. Mr Das said the fiscal deficit will be within the budgeted level of 3.9 per cent and revenues are buoyant. He said the low commodity prices pose a challenge but there are positives for India and it is time to capitalise on them. Mr Das said decline in crude prices has helped lower inflation as well as subsidy expenditure.