BANGALORE: "A major challenge for emerging market economies is to raise growth by implementing growth critical structural reforms. The focus, in general, should be on encouraging infrastructure investment, strengthening the investment climate and improving human resource skills through education and training," Jaitley said.

 The Finance Minister said despite being supported by a sharp decline in commodity prices, especially oil, and continuing accommodative monetary policy by central banks in the major advanced economies, global growth remains modest. Among the major advanced economies, recovery seems to have taken a firm hold in the U.S.

The economic activity in the U.S. is stronger than expected, and indicators point to robust growth in the short term, he said. "The global recovery continues to be weak. Although recovery in the U.S. has taken a firm hold, weak growth in the euro area and Japan and slowdown in growth in most major emerging market economies have impacted the overall global growth prospects," he said. The Finance Minister said that at this juncture the global economy is facing some major challenges.

 "First, potential growth has declined in both the advanced and emerging market economies and needs to be raised. Second, uncertainty continues about the smooth exit from the unconventional monetary policies (UMPs) by central banks in the major advanced economies," he said.

"As a consequence, global financial stability risks have exacerbated in the wake of prolonged period of low interest rates," he said. "It is in this context that we need to review the evolving global macroeconomic situation and financial market conditions so that appropriate policy responses could be initiated by the policymakers in both the advanced economies and emerging market economies," Jaitley said.