India will not let guards down on preparedness to deal with external sector vulnerabilities including those arising from Brexit. Financial Stability and Development Council (FSDC) which met in New Delhi under the chairmanship of Finance Minister Arun Jaitley, noted that uncertainty in global economy and high volatility in the financial markets are major risks confronting the emerging market economies. The council, however, felt that India is much better placed today on the back of improvement in its macro-economic fundamentals, recent financial sector reforms and large forex reserves. It said with the revival of sentiment and certain signs of pick-up in industrial activity, a good monsoon is expected to further strengthen growth. Among the other subjects, the Council meeting which was attended by RBI Governor Raghuram Rajan among others, also discussed, the rising bad loans of banks. It reviewed the measures taken by the government and the central bank for handling the stressed assets and discussed ways to manage the situation.On the occasion, Arun Jaitley said improving the overall performance of Public Sector Banks to make stalled projects functional and economically viable and increasing private sector investment are the major challenges before the government. He said that due to better spread of monsoon, the Centre is expecting higher production of pulses which in turn will substantially ease their prices.On the occasion, the Chief Economic Adviser Dr Arvind Subramanian gave an overview of the state of macro-economy highlighting important issues.