Finance Minister Jaswant Singh said that had it not been for the resilience of the Indian economy, especially the soundness of the foreign exchange position, "my job as minister of external affairs would have been much more difficult to fulfill".
Reiterating the same stance, former Reserve Bank of India Governor Bimal Jalan said that India has never had it any better.
He highlighted the ability of the country to repay the $5.5 billion Resurgent India Bonds on Wednesday without causing any liquidity crises or having any pressure on the rupee.
India is today seen as the exchange model of Asia. "The macroeconomic situation and the country's potential to reach the highest rate of growth has never been better than now," said Jalan.
He was speaking today at a function organised by the Confederation of Indian Industries in Mumbai, where the FM and bankers felicitated the former Governor on his achievements across the past six years.
Talking to a room of banking and industry friends, Jalan took the audience back to 1956 when India faced its first payment crises and needed the rest of the world to resolve the country's problem.
He then juxtaposed the past with the present, stating, "Today we are complaining of too much forex and the rupee strengthening. This is a momentous change."
While praising India's strong macro-economic situation, Jalan however, said that the public delivery system is fossilised. "It spends a lot but achieves little," he added.
Commenting on inflation-targeting by some central banks and the super-regulatory authority structure adopted by certain other countries, Jalan said that these were designed for the industrialised world.
"We cannot be prisoners of any fad. What may be right for industrialised countries need not work for developing nations like India," he added.
Jalan further pointed out that core inflation does not reflect the Indian scenario, as it accounts for just 30 per cent of the actual inflation rate, excluding rising prices of food and oil.
However, Jalan said that in banking practices, the financial operations must follow international best practices so that the Indian rupee is as good as the dollar.
While favouring autonomy of the central bank, Jalan pointed to the need for a harmonious relationship between the RBI and the government in resolving issues.
He cited how financial issues like Unit Trust of India and Industrial Development Bank of India have been repealed amicably.
