New Delhi: The falling rupee seems to have exposed government’s tall claims about the Indian economy. While the nation was staring at an imminent economic crisis, it was busy trying its ambitious bill Food Bill passed, costing the national exchequer Rs 1,25,000 crore.
However, hardly had the euphoria died down, the government came face-to-face with the hard reality, with the rupee’s fall creating a new record. No wonder, Commerce Minister Anand Sharma has hinted on using country’s gold reserves to contain the current account deficit (CAD) even as experts and analysts see troubled times ahead. “We are looking at inflation going further up,” market analyst Sunil Shah told News 24.
With the Rupee plunging to a record low of 68.80 against the US dollar, the Opposition targeted the government, with former finance minister Sinha saying the only thing that can stabilize the situation is for the government to resign and go for fresh elections.
However, hardly had the euphoria died down, the government came face-to-face with the hard reality, with the rupee’s fall creating a new record. No wonder, Commerce Minister Anand Sharma has hinted on using country’s gold reserves to contain the current account deficit (CAD) even as experts and analysts see troubled times ahead. “We are looking at inflation going further up,” market analyst Sunil Shah told News 24.
With the Rupee plunging to a record low of 68.80 against the US dollar, the Opposition targeted the government, with former finance minister Sinha saying the only thing that can stabilize the situation is for the government to resign and go for fresh elections.
Meanwhile, Finance Minister P. Chidambaram is ready with some medicines for a sluggish market and falling rupee, including promoting exports, reviving investments, containing fiscal and current account deficits, raising capex of PSUs, recapitalising PSU banks. Chidambaram said, "If we are patient, firm and clear headed and once we take these steps, the economy will begin to turn and we will be able to build a strong economy."
But Sharma's suggestion to "monetise" gold to set things right has belied the government claims that has been claiming external forces are responsible for the current crisis. Experts believe if the basic shortcomings had been heeded, things could have been better.
Economist NarendraTaneja says, “the UPA doesn’t care for the government. It aims at only vote bank.”
The irony is Sharma’s suggestion has come at a time when India has left the 1990 crisis far behind. We are living in the times of market and globalised economy. However, it would be grave mistake to undermine investors’ sentiment who should be wary of India’s bureaucracy, policy paralysis, falling credit rating amid a resurgence US economy.
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