who underwent a kidney transplant surgery in May, resumed charge as the minister of finance and corporate affairs on Thursday and reviewed the state of the economy with senior officials. Jaitley’s return to the North Block coincided with Moody’s revising up its 2018 India growth forecast by 20 basis points, from its prediction in May, to 7.5%. The global rating agency recognised the economy’s resilience to weather external shocks, such as elevated oil prices.

His return comes at a time when the economy is facing renewed challenges, despite its inherent strength to absorb shocks. A spurt in trade deficit and the depreciation of the rupee that would inflate costs of imports further have threatened to worsen the current account deficit (CAD) in the current fiscal. Forecasts of CAD vary between 2.5% and 2.7% for the current fiscal, up from 1.9% a year earlier. Collections of goods and services tax have been less than anticipated and the impact of a cut in the indirect tax rates on a host of items in July is yet to pan out. Public sector banks continue to struggle with stressed assets, although their losses are down 73.5% in the June quarter from the previous three months.

Although the Centre has reiterated its commitment to the fiscal consolidation path and meeting this year’s deficit target of 3.3% of GDP (last year it allowed a slippage from the original target of 3.2% and settled for a higher 3.5%), it seems a daunting challenge.

While the Centre’s GST revenues have been below the target by a quarter and disinvestment receipts have been sluggish, the continued reliance on public expenditure to spur growth and a likely uptick in welfare spending around the 2019 general elections are threatening to upset the budget numbers.

In its Global Macro Outlook for 2018-19, Moody’s cautioned that the rise in energy prices over the last few months could push up inflation temporarily, although India’s growth story remains intact, duly aided by strong urban and rural demand and improved industrial activity. The economy will grow 7.5% in 2019 as well, according to Moody’s.

An upside to inflation comes from strengthening demand, which is reflected in rising core inflation. “We, therefore, expect the RBI to continue on a steady tightening path into 2019,” Moody’s added. Retail inflation hit a nine-month low in July but still held above the 4% mark and the weak rupee has raised risks to price inflation from costlier imports.

Earlier in the day, the Rashtrapati Bhavan said in a communiqué: “The President of India, as advised by the Prime Minister, has directed to assign the portfolios of the minister of finance and minister of corporate affairs to Arun Jaitley.” In his absence, railways minister Piyush Goyal was given the additional charge of both the finance and corporate affairs ministries. Jaitley had remained a minister without portfolio.

Jaitley had stopped coming to office around a month-and-half before his May 14 surgery, although he was then working from a “controlled environment” at home to avoid infection risks. Upon his return on Thursday, Jaitley met senior officials, including finance secretary Hashmukh Adhia. The visitors to his room, although limited, are required to cover their shoes with the blue plastic bags that are used in hospitals.