Union Finance Minister Arun Jaitley stressed the need for a judicious mix of fiscal, monetary and structural policies by major economies to deal with the heightened uncertainty on account of Brexit, or Britain's exit from the European Union.
In his speech, read out by Joint Secretary in the Finance Ministry Raj Kumar, Jaitley said that Britain's decision to exit from the European Union, commonly termed as Brexit, has further heightened uncertainty, market volatility and risk-averse behaviour.
"Governments, Central Banks and regulators have to mitigate the pressure of such vulnerabilities through judicious mix of fiscal, monetary and structural policies," Finance Minister Arun Jaitley said in his speech at the meeting of the Board of Governors of the New Development Bank (NDB).
Kumar represented India at the first annual general body and board of governors meetings of the NDB which took place in Shanghai on Wednesday, as Jaitley could not attend it because of the ongoing Parliament session back home.
Outlining the challenges, he said the current global economic context is far from being robust and is marked by a modest pickup in some advanced economies from their low levels of growth.
He also said that decline in growth in emerging markets and developing economies, increased financial sector volatility, and, in general, a downward revision of global growth projections by the International Monetary Fund (IMF) also pose challenges.
The IMF earlier this week cut global growth forecast for 2017 by 0.1 percentage point to 3.4 per cent citing "substantial" increase in economic, political, institutional uncertainty on account of Brexit.
Jaitley said the structural problems of emerging markets and developing economies (EMDE) continue to affect their growth.
"The sluggish global trade and low commodity prices have also adversely affected commodity-exporting EMDEs, by aggravating their corporate and other economic vulnerabilities," he added.
India, Jaitley stressed, is following the approach of "reform to transform" through far reaching structural reforms.
"We have taken several initiatives to boost investment climate and improve the ease of doing business," he said.
Referring to the initiates, he said setting up National Infrastructure Investment Fund would stimulate investment in infrastructure and Insolvency and Bankruptcy Code 2016, for easier exit of companies have been passed by Parliament.
Besides, programmes such as Make in India, Start-up India and Skill India are focused on encouraging innovation, entrepreneurship and job creation.
The government has launched a massive financial inclusion programme and more than 20 crore bank accounts have been opened for the unbanked persons.
"We are now using Aadhaar, a unique identification system with statutory backing, as backbone for targeted delivery of financial and other subsidies, benefits and service," Jaitley said.