Hyderabad, July 20 - India's financial sector is sound and the government is closely monitoring the evolving macro-economic situation, Vijay Kelkar, chairman of the 13th Finance Commission, said here Monday.

He was speaking at a meeting with Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy and state government officials.

'Inflation is under control; the balance of payments position also continues to be sound. The government has shown its willingness to enact significant monetary, fiscal and sectoral policy measures to minimise the negative impact (of the global crisis) on the real economy,' Kelkar said.

On the international front, India is actively coordinating policy action with other countries for reform of international financial institutions as well as improved regulation and supervision of global finance.

Recent forecasts are for around 6.7 percent growth in 2008-09, down from 9 percent in 2007-08.