Economy Minister Ajay Seth said the global financial situation was scary and caution was warranted. He also mentioned that Monday’s meeting of the Financial Stability and Development Council (FSDC), chaired by the finance minister, took note of the “frightening challenges” facing the global economy.

Speaking to the media after the FSDC meeting, Seth said: “The global financial situation is scary, but at the same time, India’s economy, especially the Indian financial sector, is well protected. Regulated systems are in place, but we have to be careful and alert.”

It should be noted that the FSDC meeting took place against the backdrop of the US debt ceiling, with Janet Yellen warning of a constitutional crisis if Congress does not act on the debt ceiling. This closely follows bank failures in the US and Europe.

Seth added that the council had been discussing the introduction of early warning indicators to identify stress in the economy at an early stage. “As far as there are early warning indicators, they are the set of indicators or the assessment of the economy so that the stress in the financial sector can be noticed in time so that corrective measures can be taken,” adding that it is a set of indicators in progress.

The debt limit is a law that limits the state’s borrowing limit. The current limit of $25 trillion was surpassed in January. Congress votes to raise or suspend the limit on additional borrowing, which is routine. This time, however, Congress does not agree to the terms. The impact of the unloosened debt ceiling would delay federal spending, including salaries and pensions.