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India capable of withstanding global trends, says Arun Jaitley

New Delhi, Aug.22 : Finance Minister Arun Jaitley on Saturday said the country was capable of withstanding fluctuating global economic trends.

Speaking at a seminar here, Jaitley said various parameters of Indian economy pointed to positive signs.

“What is our own growth potential? What are our own inflation figures? What are our own revenue collections? What are our own foreign exchange reserves? At what pace is our own capital investment in infrastructure in increasing? What is the prospect of our services. Our agriculture this year. What are our consumption patterns likely. These all are indication of positive gestures. And I have no doubt to our ability to withstand these transient global trends created predominantly is very strong,” said Jaitley.

World markets have been spooked by fears of a China-led deceleration in global growth and escalating tension between South Korea and North Korea.

Indian companies are worried the Yuan’s devaluation will flood the local market with cheaper Chinese imports, worsening the bilateral trade deficit.

Global stock markets tumbled after a survey showed Chinese factory activity contracted at their fastest pace since the depth of the global financial crisis in 2009.

The Indian rupee too touched a low of 65.90 per dollar, the lowest since September 2013, tracking selloff in other Asian currencies.

Jaitley said the economy was bound to be temporarily affected by external factors, but added the fundamentals were strong.

“For us in India these challenges are created by external factors. When they are created by external factors it could be the uncertainty which the prospect of rate hike by US Fed when will it happen. That creates an uncertainty one day,” added Jaitley.

India has built up record foreign exchange reserves to insulate the economy from capital flight as the United States prepares to lift interest rates.

Reserve Bank of India Governor Raghuram Rajan has long warned of the risk to emerging economies when the U.S. Federal Reserve makes the first rise in its zero percent interest rates since the 2008 financial crisis. (ANI)