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A wrong approach to solving the rupee crisis
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Bikky Khosla | 21 Aug, 2013
The rupee broke all previous records on Tuesday, hitting a fresh low of 64.13 against the US dollar, and this happened despite the RBI's strong intervention last week in the form of capital controls on companies and individuals, and drastic reduction in the limit for overseas direct investment by domestic companies. In fact, it is clear that these very measures taken to arrest the rupee's fall have backfired, with the currency continuing to slide and the stock markets going into a free fall in the following days till yesterday. Finally, the central bank had to reverse its hawkish stance yesterday -- a step that helped the rupee close at 63.25 against the dollar.
Why has government failed to arrest the rupee slide? Of course, there are a number of factors responsible for this, including worsening current account deficit, low FDI inflow and high FII outflow, rising import bill, and strengthening of the dollar, and as most of these problems are interrelated, the government's 'quick-fix' approach to solve them has failed miserably. As they try to solve one problem, another one surfaces, and this signals that a different approach is needed to address these challenges. I think there is an urgent need to reduce our trade deficit. New policies are required to encourage exports to new destinations and urgent steps should be taken to establish a single window clearance system to reduce process delays.
In addition, I feel the government should strain every nerve to reduce its debt by cutting expenditure, but unfortunately it seems that they are doing just the opposite -- the Food Security Bill, which aims to provide subsidised food-grains to nearly 67 percent of India's population, is the biggest example of this. They are using it as a political weapon to impress the voters before the General Election, and I fear that the opposition will let the Bill pass for the same reason. The National Rural Employment Guarantee Act (NREGA) is another such scheme, which, according to me, has been run without a sound mechanism and mainly for political interest. We need these welfare schemes, but right now the economy is not in a position to shoulder such a burden.
Coming back to the RBI, I think the central bank's Tuesday move to infuse liquidity into the cash-strapped banking system is a welcome one. It kept its focus away from growth for a very long time -- earlier to rein in high inflation and then to arrest widening current account deficit -- and now I think it should emphasis on growth and help the Indian industry get out of the high interest regime. The recent reversal of the policy stance would help make more credit available for the industry and push down bond yields. In addition, the decision would also give a relief to the bankers who were expecting further worsening of their NPA problem due to the past rounds of liquidity tightening measures by the RBI.
I invite readers' feedback on these crucial issues.
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A WRONG APPROACH TO RUPEE CRISIS
JEGATHEESAN .S. | Tue Sep 3 11:23:51 2013
PREVIOUSLY EXPORTERS WERE GIVEN ALL TAX BENEFITS SO WE GOT USD.TO BOOST FURTHER EOU UNITS WERE FULL TAX BENEFITS.NOW ALL THE TAX BENEFITS WERE WITHDRAWN BY OUR FINANCE MINISTER.ALL THE SMALL AND MEDIUM EOU UNITS HAVE COLLAPSED DUE TO INCREASING COST OF PRODUCTION . IT IS ENOUGH THE GOVERNMENT GIVE ALL TAX CONCESSION INCLUDING INCOME TAX TO EXPORTER INSTEAD LOOKING FOR FDI ,AND GIVING CONCESSION TO FOREIGN MULTINATIONALS.
RUPEE FALLING
AGNELO | Wed Aug 28 04:23:19 2013
BEST WAY IS TO RAISE THE INTEREST TO 12 % FOR THE US DOLLAR THIS IS SHOULD ONLY BE DONE ON FIXED LOCKING TERMS FOR ONE YEAR AS THE DOLLAR RATE INTEREST IN THE OUT SIDE WORLD IS JUST 3%
Wrong approach to rupee sliding
manohar | Wed Aug 28 01:38:34 2013
Politicians play with economics, and economists keep mum, to please politicians for their personal gains. Even a child will tell that unless our exports increase, current account deficit will not be contained. FDI,FII this is borrowed money it can leave us anytime, and that is happening repeatedly. Let Nation go to hell. They want to get elected again, and that is all. Be it any political party.
Falling Rupee
Ajit Kumar | Tue Aug 27 07:11:04 2013
Bring it back to the fixed currency regime as it used to be till in the nineties and fix it to the rupees current fundamental value at 51.50 to a Dollar for now. The people of India have a right to demand to the Govt. of India for its removal from the trading in the interest of the countries falling economy due to high inflation and CAD worries. Request one and all to get up from deep sleep and come together and exercise our demand before its too late.
Devalued rupee
kv satyanarayana | Sat Aug 24 03:03:22 2013
We need to control imports like crude oil by allowing castor oil in the automobile industry for diesel engines. We need a bleeding heart for India at the highest position in the Government. Our mistake to elect this foreign mother and child regime.
Govt acting in haste
Vijayakumar Samuel | Fri Aug 23 16:15:43 2013
Sir
The value of Rupee against the Us dollar seems to be the most important concern of all-the government,the trade,and even the common man.So every one is trying to do everything possible to save the Rupee from being buried rather than falling.The government which holds the power to act seems to be acting in haste which is not having its desired end. So apparently we are not talking the root of the problem but are like our EB line men chopping one branch here and another there to prevent short circuits.Fortunately we are not importing Food grains like before but our Oil bill, both food and crude is the main culprit.So it goes to show that neither the politicians nor their Advisors seem to be honestly concerned about the country's development.The Arabs gave us the first Oil shock in 1973 and now after 40years we depend more on the imported crude, coal than any other alternative energy source.There are plenty of agricultural sources like Pungam,Jatropha seeds which if given a scientific approach would have come to our aid I think the government prefers more alcoholics in this country than motorists who could use the ethanol in their Petrol vehicles.As for edible oil imports the less said it is better.The nation is now paying for the mistakes of our planning and executions of various projects by the governments and I hope at least now they will wake up and correct the anomalies so that the future generation will not see a great nation like India sold for a song
NREGA making Indian farmers leave agriculture
Palanisamy .S | Fri Aug 23 08:46:39 2013
1. You are correct. The National Rural Employment Guarantee Act (NREGA) is another such scheme - which makes Indian farmers to leave the agriculture and go to some other line of activities, which will make all physical working Indian to become world most lazy people.
It may lead some one become NEW Bhagat Singh to kill all bad self centred politicians. The time is nearing.
2. It is fortunate that we do have technology, but it is unfortunate that technologies become useless unless it takes correct path to manufacturing activities for Indians use & for export. Just see your pocket, it is someone's mobile is with u. it is not Indians. u carry 10 k to 20k of others money. when u allow 100% investment in telecom it will lead indirectly to pump all your money to others.
Think intellectually before going for any new policies.
Use our universities to discusses & decide and Not our Politicians!!!
Let out IT companies stop sweeping London and Newark streets. Let them use our engineers to do engineering, not sweepneering????. This is also a indirect method like " National Rural Employment Guarantee Act"
Thanks for reading ...
S.Palanisamy
India -A Trading Country
Sahniashish | Fri Aug 23 07:49:11 2013
We have made India a "Trader's Paradise".
The current phase is an outcome of not having created a conducive business environment.We have not strengthened industry, painted our Industrialists a Villain,provided sub-standard education and research and even more sub-standard opportunities to the very deserving minds.
The outcome
Brain Drain, Rupee Devaluation, Import of Technology, Import of Goods and market in India.
Still we can learn - the best example is our own very successful formulas of green revolution and white revolution where we glorified our farmers and cattle owners, this has led to two of our problems resolved. Next should be an SME/MME revolution, Glorify and assist our entrepreneurs, invest in quality education and research, bring genuine value addition within the country and we can see a phase where 1 rupee = 65 dollars. I personally dont believe any emergency measure will bring in a permanent solution.
A wrong approach to solving the rupee crisis
VIDYA | Fri Aug 23 07:32:45 2013
I READ THE ABOVE ISSUE. SEE IN ALL, GOVT IS NOT CONCENTRATING THE EXACT ISSUE. COMMON MAN IS FACING BIG PROBLEM FOR THE SAME. WE HAVE GLOBALIZE OUR RUPEE ITS NON HANDLED THING FOR INDIA.EVERY THING COMES ON THE ARMS OF COMMON MAN WE PEOPLES MAKING OUR POCKETS EMPTY FOR PETROL,HOUSING LOAN,. SHOULD STOP GOLD PURCHASE AT LEAST FOR 8 TO 10 MONTHS, STOP IMPORTS FOR ELECTRONIC GOODS. STAND FIRST WITH OUR RUPEE. INDIAN CURRENCY SHOULD KEEP IN INDIA.
CRAZY is a mild term for GOI
Kapur | Fri Aug 23 05:15:57 2013
What caused this crisis?
1. Programs such as MNREGA, pouring money into unproductive schemes.2 Runaway government expenditure causing fiscal deficit.3. Continuation of subsidies on diesel, fertiliser adding to fiscal deficit
Then to meet cash needed for these deficit causing policies, extortionist tax demands such as on Vodafone, Nokia, Shell etc followed by the most regressive Retrospective Tax proposal and GAR in Pranab Mukherjee's last budget was the beginning of foreign investor's loss of confidence in GOI's word of honor. Who would put money where it could be seized and extorted ?? On the contrary rhese lead to flight of foreign investment in India, causing both CAD and capital account depletion of dollars. Multiply their implications.
And now the Food Security Bill to get votes Who pays for the subsidy when GOI's pockets are empty ?
CRAZY is a mild term for GOI's policy makers.
The facts in the article are one sided.
dakshinamoorthy | Fri Aug 23 03:43:16 2013
Instead of blaming the government for stopping the welfare schemes like Food securty bill and NREGA why do not we thick of reducing the trade deficiet by the following measures.
1.) Do not use own cars and use only public transports.
2.) NO purchase of gold for atlease six months.
3. No imported electronc gadgets.
Without the above we can live whers the governrmnt welfare schemes are lifeline for poors.
Crash of Indian Finance Currency.
David | Fri Aug 23 02:06:20 2013
The currency, Wheather it is Yuan, Yen or Dollar, the global parity may create less deelopment in Indian economy.Formations of Brics, easy flow of capital goods based own currencies could trigger Indian economic developments.Some countries using
currency as a political wepon and biased to trade war.Currency printing by any nation aganist Indian rupee must curb by proper diplomaic efforts.The rating done by few vested interest will not allow to work out.Creating liability by few vested
foreign agencies trying to halt national growth. This has to be addressed SOS, emergency level by the leaders and rulers of the nation.
Sliding Rupee
Sreenivas B Asuri | Thu Aug 22 23:47:10 2013
India’s is a very entrepreneurial economy and the average business person is very innovative. The government has to merely create the right climate and get out of the way. There is no reason India should have a budget deficit given the wide variety of products and services it excels in. There should be a greater emphasis on promoting exports.
how to stop the reducing of rupee
ABHILASH AGRAWAL | Thu Aug 22 17:52:04 2013
i think these solutions are not enough.why we are not using the things which are import from other countries except petrol and diesel.i think we can save dollers if we will used imported goods minimum.why govt.sector banks faces the maximum problem of NPA.if this problem may solve i think a small support for rs.ONE more thing i want to say that if govt.can reach the money which is in black form in foreign banks of indians.that would be a mile stone to stop the rs.
CAD issue 11
Vijay Goyal | Thu Aug 22 17:04:07 2013
Credit should be given for affordable Housing Property & Production Activity only , not for Luxury Expenditure ,never allow loans for Private/personal CARS these car always create burden on the country by increasing oil import bill. We have not to promote the use of personal Cars, we have to always use public transport system or taxi. By financing Taxies & commercial vehicles can create additional Job opportunities around 5 lacs new Jobs per year can be created. Taxies should be financed @ 8% interest rate with the pre-condition that it should be painted as per the taxi provisions & part of intelligent traffic control system (like Metro/radio Taxies) they should be metered & driven by dressed and licensed taxi drivers/staffers. And also state govt. should minimize the road tax on these taxies also so they can become at par with Personal Cars in operational cost
4. We have to make arrangement for Cross subsidy of Public transport. A pollution &, Road Tax Paid by private/personal car users ,on withdrawing depreciation benefit on passenger cars used by corporates, Business man & professionals , could help to pay better buses so we can avoid a migration from Buses to two wheelers And Cars.
CAD issue 10
Vijay Goyal | Thu Aug 22 17:03:31 2013
In the Country there is war in parliament to withdraw LPG Subsidy. I suggest in first phase Govt. have to withdraw Depreciation Benefits on passenger cars (Excluding used as Taxi) used & owned by Corporates, Businessman, Professionals. The depreciation is one kind of 100% subsidy which we give the person who does not deserve of these in Income Tax. Interest Paid/EMI paid should not allowed as Expenses this is also a kind of 12-18% (as Interest Rate) per year additional subsidy apart from deprecation benefit. This will generate addition funds for business that will increase for productive use & generate more employment.
CAD issue SAve Oil1
VijayGoyal | Thu Aug 22 17:02:27 2013
As India is a large importer of crude oil, would give a boost to exploration activity in oil & gas. Through this we can bring down the imports in future. As the saving of fuel is directly equivalent to fuel produced following measure should be taken to save the fuel.
Public Transport system like Green Energy Low Floor City Buses (Electric Buses / CNG Buses), Metro Trains, Shuttle trains, Sky trains etc. with PPP module should be planned for the Metro cities with immediate effect.
1. As people are getting One day holiday in a week; voluntarily declaration for any one day holiday i.e. not to use his personal car in any one day of the week Days i.e. Monday to Friday should be made Mandatory. This will reduce 20% traffic of Cars on Roads of metro cities.& save fuel also.
(To implement this traffic department have to make online registration portal where the personal car owners have to register their cars for which they want to declare not to use his personal car on week days (Monday to Friday) . on Metro city wise in following format :-
• Date of registration of Car.
• Car Registration No.
• Name of Home City they are using car.
• Name & address of Registered Owner.
• Contact Number & name of Contact person.
• Day of holiday
On registration the system will immediately generate a unique registration number. There should be colored Florescent sticker Say For Monday -Violet, Tuesday – Indigo, Wednesday-Blue, Thursday-Green, Friday- Yellow.
CAD issue 9
Vijay Goyal | Thu Aug 22 17:00:56 2013
Linkage Quantity of Coal should be based on the basis of his last year actual consumption based on his production records submitted to Central Excise & customs department. If he have allot more Quantity as compared to production records the next year quantity should be less on pro- rata basis.(this should also be cross checked on quarterly basis also. The allotted quantity & lifted Quantity should also be published on concerned Ministry web portal also year wise & month wise
As i suggested govt. have to call bidding for to develop the mines & mine the coal. By doing this price control is in the hands of Govt. on which price govt. want to sell the coal/iron ore to users.
In last one year there is 80-90% coal prices have been increased. This benefit will be in the hands of Govt . As I have suggested govt. have to pay the bidder only mining charges. & ownership & lease rights are of Govt of India only.
e auction route to allot the coalmines will stop further development in the country.
CAD issue 8
Vijay Goyal | Thu Aug 22 16:56:43 2013
Evolving a coherent and transparent environmental policy and a fair and effective compensation mechanism for Land acquisition will be crucial for the coming years. This is especially important for the health of the mining industry which is otherwise vulnerable to any sudden changes in those areas.
How to allot Natural resources i.e. Coal Block & Iron ore mines in India for Further development in the country.
The auction route to allot Natural resources i.e. coal/Iron ore mines will stop further development in the country. by allocating coal/Iron ore mines for captive use will totally stop label playing opportunities for whom those not having their own coal blocks /Iron ore mines for captive use.
Ownership right should be withdraw from mine owner because natural resources are the only national property.
So I suggest Govt. of India has to allot the coal Block/Iron Ore mines for to develop the mines & mine the coal (mining Job work only) through open auction bidding Process. Their after Govt. of India Fix the Price of Coal Grade wise (yearly on 15 march) valid from one year starting from 1 April to 31 march. For the actual users the govt. has to provide linkage facility as he is presently use to allot coal.
Linkage Quantity of Coal should be based on the basis of his last year actual consumption based on his production records submitted to Central Excise & customs department.
CAD issue7
VIjay Goyal | Thu Aug 22 16:55:03 2013
Formulate a clear and comprehensive FDI policy for all sectors of the economy. In particular, clearances need to be given for FDI in retail sector as it has the capacity to effectively check surges in food prices by modern storage facilities. We have to improve the efficiency in grain procurement, storage and PDS with the help of FDI. It is common knowledge that there is a huge amount of preventable wastage occurring in this field and the massive loss being incurred in PDS must be dealt with.2. Given the constraints on government funding, the government is expected to focus more on private sector participation or PPP in infrastructure sectors like roads, power generation and distribution and airports. However there are several bottlenecks that need speedy resolution to spur growth. Reduction in pace of project awards, land acquisition issues, environmental clearances issues, raw material linkages are some of the constraints that are resulting in slower pace of progress in the infrastructure sector.
The speed of the reforms process has perceivably slowed down in the recent past. Market participants would look for measures that indicate the government's resolve to continue with the reforms process. One such measure that could boost the market could be allowing FDI in multi-brand retail, defense (up to 49%) and in insurance. Other measures that would give market confidence would be the passage of several pending bills like the Mines and Minerals Bill, Land acquisition bill.
CAD issue 6
Vijay Goyal | Thu Aug 22 16:51:39 2013
Instead of increasing tax celling I suggest to increase Tax Exemption Limit of Infrastructure bonds should be increased from Rs20,000/- to Rs 5,00,000/- under section 80c.for Year 2013-2014. This will help to allocate additional funds to Infrastructure development.
The country needs to increase its road and rail infrastructure. Increase spending on healthcare infrastructure & as the government has been increasing its allocation to the Ministry of health & family welfare. as our existing health care infrastructure is highly inadequate
I suggest in addition to Exemption of Infrastructure bonds to 5 lac there should be additional exemption limit for Life& health cover policy Rs50000/- & for Tution Fee of Rs.25000/- for the people who have Max. Two dependent children. (If Both are Female Child than it should be Rs.50000/-.)
Make long term, strategic investments in Infrastructure (particularly creation of new power utilities and reduction in transmission loss), healthcare and education. Lack of a healthy and skilled workforce will adversely affect both industry and service sector. Particular attention must be paid to improving the living standards in rural India. Generate more employment opportunity in rural India to bring down the migration of farmers, provide impetus for the agricultural sector, improve productivity & balance the demand supply mismatch.
CAD issue4
Vijay Goyal | Thu Aug 22 16:49:50 2013
1. As people expecting/demanding to Increase the ceiling of Income Tax from 1.8 lacs to 3.00 lacs to increase consumption this would leave more money in the hands of the consumer to spend and thereby increase consumption. The level of inflation has been growing at 8% to 10 % annually .As the govt. has already widened the tax base (Service Tax) has increased the tax burden of the common man. If government increase the ceiling of Income Tax will leave more money in the hands of the peoples which will directly help to increase the consumption.
At present scenario of Demand & Supply mismatch will result the increase of inflation at the extent of 10-12%.Primary articles inflation has been an issue due to surging demand and supply shortage. More focus needs to be there on increasing acreage/area of agriculturalable land and productivity in agriculture. Focus should also be there in reducing risks due to poor monsoon. This would include promoting further and subsidizing modern irrigation techniques. While manufacturing inflation has been benign so far increasing global commodity especially oil prices have the potential to derail economic growth.
CAD ISSUE 3
Vijay Goyal | Thu Aug 22 16:47:10 2013
Govt./ Banks should issue Mega Infrastructure bonds (bearer Bonds like Kishan vikash patra)/ Deposits With capital gain Tax Exempted benefits On interest rates @ 6%with minimum locking period of 5 Years. And the people who take loans against these bearer bonds for period of 5 year on 3% higher than the rate of deposit no source of income will be asked i.e the same can be shown in current FY 2013-14 as income from other sources head and the investment against above bonds & deposits upto 31-03-2014 is exempted from income tax upto limit of 100 crors individually by doing this the people having surplus undisclosed money which is deposited in Swiss Bank or kept in lokers will come out . I aspect around Rs 5 lac crors additional liquidity may be added in the market. Apart from this govt. will also get 15% INTEREST INCOME ON THESE DEPOSITS. in five year (3%x 5 Year=15%).
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As this facility is available only for those who take loan against these bearer bonds a adequate funds will be available in the system for further development / progress in the country.
Once the money is circulated in legal channel this will always give revenue to Ex- chequer in further also.
How to resolve CAD issue 2
Vijay Goyal | Thu Aug 22 16:46:03 2013
As we heard through Media that around Rs. 71 lacs Crores are deposited in Swiss bank from Indians.
As people/politicians saying that this money can be bring India by passing Bill in parliament and ask to send back money in India which is deposited by Indian politicians ,Business Man , Bureaucrats, any individual ,company ,firm , NRI etc.
I think this is impossible thought /idea, think a country whose major portion of economy is run/govern by these fund why they will return the money to Indian Government. Think by returning money to Indian Government what is benefit to Swiss Govt. why this type of foolish decision SWISS Govt. will take.
I suggest a how we can Bring Money in India which is deposited in Swiss Bank by above persons.
(1)Allow to Make a Private Ltd/Public Ltd.. Company Registered in India ,with 100% holding of Indian Nationals or NRI.
The prime motto of these companies to promote / invest these funds in Infra Structure Industrial Project, Roads, Dams, Public Transport System, Express highways, Metro Rail, Airports , Education sector etc. The funds brings by these company in the form of dollar from Swiss Bank ,Indian Government will have to give amnesty i.e. No source of fund/income will be asked if That person provide a certificate that these funds are transferred/Bring form the deposit of fund with Swiss Bank or other tax haven countries before 31/03/2013.The Fund received through above channel should be Reserved for capital Investment Purpose only.
How we can resolve CAD issue
Vijay Goyal | Thu Aug 22 16:43:40 2013
I suggest to all concern people for present Industrial Growth & liquidity crisis, RBI should announce relaxation in NPA norms for two years with immediate effect & also CRR cut of 1.5 % with immediate effect. And also instruct banks for Industries who are availing working capital / cash credit facility straightway increase by 50% for minimum six months on adhoc basis from today and also ask Industries to submit their financial requirement proposals and they should be asses new requirement and finalise it within 30 days to safe guard the Industries specially Infrastructure sector i.e. Steel & Power.
All term loans should be restructured for minimum two year. If this step is not taken up to Dec-2013 there is bright chances of Rs.1Lacs Crores NEW NPA. Once the industries account is are declared as NPA, the only options left with the industries is to close the unit & this a irreparable National Loss. To make efforts to continue the existing industrial unit is more than to establish new unit in the national interest.
The present problem in the Steel & power sector is due the Govt. of India has not allocated sufficient funds for it infrastructure developments i.e Road , Dam, Bridges, fly over , railway, airports Public transport metro rail , sky rail etc. & shifted their focus to FOOD Subsidy. If funds are released for above propose this will create new Jobs and there is no need to give food subsidy to 65% of counties population . This can be reduced by 45%.
GOVT . is CORRUPT and short sighted,,,,
J KANNAN | Thu Aug 22 16:30:44 2013
we are a manufacture of Medical Equipments and we also got award from central Govt. in 2010. but The same product we could not sell in any govt. Institutions since we don't want give any bribe or corrupt to get our business. So all Govt.purchased simi;lar product from MNCs and paid 60 to 70% more , since MNCs can pay money through diffrent channels and their turnover is very high and they can pay bribe in any currency, at any country and in any account.
rupee slide
n k madhi | Thu Aug 22 14:48:40 2013
The writer appears to be a confused. Rupee slide vis a vis Dollar or Euro etc can be arrested only if:
1. Population is controlled.(mouse rate in India).
2. Stop Import (Why chinese mobile, toys?)
3. Export India's products
4. Promote Biodiesel and Bioethanol
(Petroleum Ministry Official are to be blamed for this.)
Ruppe Crisis
GHANSHYAM | Thu Aug 22 13:15:04 2013
Agree and not agree with opinion, b'coz so far as india is concern we are well depend upon US and EU, Now time change we have to see towards African Country also.
A wrong approach to solving the rupee crisis
Chainrup Singhi | Thu Aug 22 12:03:11 2013
simple solution
Increase the Price of petrol to Rs. 175/- per litter : looks hard but will compel every Indian to down grade little :from less use of cat, car pulling or down grade to two wheeler,
two wheeler fellow to bus & like that we can reduce the demand of petrol by 80% and will Result in Reduction in dollar price: , less traffic. less accident, less road maintenance cost..
its total mishap
mayank jha | Thu Aug 22 10:59:08 2013
its a shear failure of UPA/monmohan singh. in last 8-10years there is no major steps to create manufacturing sector. upa things that tey will strengthen economy by simply FDI, its a wrong approch, forign investors can drain economy any time like they are doing now. our approch shall be creating new sectors of job growth, not food security/menrega,or such wastfull schmes.
indian is so big but no indian brand exist in world map. all mistake is of indian who has elected this fool govt.
Rupee defisit
Raju | Thu Aug 22 09:26:31 2013
I would like to say, If India Govt would put some barrier the tendency of each and every persons interest to invest in real estate business. ie; many are eager to purchase more and more flats, plots etc.., One should purchase one flat for them balance savings must be for the industrial growth of the country. Air India Flights are running from govt. pocket. Govt must ban all these incentives of travelling in flights for govt employees. Govt must take back all the 1000 denomination notes. There are many remedies to solve these type of problems.
A wrong approach to solving the rupee crisis
Madhav | Thu Aug 22 09:14:51 2013
In addition to all the points you discussed that relate directly to economics, I think some reasons are affecting more than anything else.
one such example is law and order situation. If investors don't feel safe to move in the country, if factories have to be moved out of state, if red tapism slows the process painfully, if cost of projects multiply before completion, who would want to invest?
A wrong approach to solving the Rupee Crisis
M.Nagaraju | Thu Aug 22 08:45:46 2013
Sir,
I strongly agree with your observations that instead of curtailing fiscal deficit,and CAD the govt. is introducing Food Security bill to get back to power. All political parties will support for the same reason.I think we should seek the help of Supreme court to stop the Food Security bill on the ground that Indian Economy cannot afford this expenditure at this juncture. Second ,in order to reduce CAD let there be total ban on all luxury items ,cheap imports of poor quality items from China. Third our Defence sector imports lakhs of crores of Defence equipments from Europe, US.we can give more thrust on our indigenous development as we have about 9 leading Defence PSU like HAL, BEL,BDL,MIDHANI,BEML,Cochin Ship yard etc., DRDO,RCI, Heavy Vehicle Factory and about 30 Ordinance Factories.Besides we have Private Sector Giants like L&T, Reliance,Tatas ,Birlas etc., Third important factor should be to accelerate growth in manufacturing sector to help employment generation and export growth. Let there be consensus on these issues with all polital parties before we Elect a new Government in the interest of our Motherland.
Time to go global
Wasim Siddiqui | Thu Aug 22 08:45:26 2013
Dear readers,
It was wonderfully placed article giving general overview of the rupee sliding. According to me the best way to curb this falling is just increase our production capacity in the industrial, agricultural sectors. Industries need to understand the market & stop importing & start the exports more. We need to be self reliant. Yesterday I read somewhere that some big industries who are engaged in exports businesses are hugely benefited by this fall. So we need to focus more on our domestic manufacturing sectors & lets focus on developing the Global Brand like Amul to curb the necessity of the different consumers around the globe. Every adversity has its own opportunity. As an citizen & industrialist of this wonderful country I would see more entrepreneurs & venture capitalist to fund & invest in the new projects to make India a self reliant & super power in every respect.
Falldown Rupee rate
Nagarajasetty.K. | Thu Aug 22 08:21:25 2013
Rupees are falldown due to indians like imported items only. All of us should buy india made products only.Avaid ourself to buy the imported items and save the petrolium products.Indians black money to be come out. Export our products,this is the only suggesion.then only dollars come down.We indians serve india.
rupees woes
PROF RAM NATRAJA | Thu Aug 22 08:18:39 2013
did the esteemd president of india the honble pranabjee not sow the seeds of this destruction by wrongly timing the gaar........did he not waste years in making the fin ministry a dead horse........THE RESULT IS THERE TO SEE........EVERY SINGLE MBA AND ENGINEER IS CRYING FOR EMPLOYEMENT
Why hue and cry regarding a good phenomenon?
B. L. Sharma | Thu Aug 22 06:59:34 2013
The question is: If the Rupee falls to the extent of Rupees 100 per Dollar, what will be the impact on the economy of India and what will be the final outcome? The most important impact will be on the imports and exports. Imports will cost almost double, and thus likely to come a minimum low. The cost of crude oil will affect the common man. So far as other items are concerned, we can easily do away with the use of imported items by producing ourselves. Exports will increase considerably and thus this will be end of Trade Deficit. Inflation may rise for a specified period. At present, the rate of inflation is below the interest rates, if it goes up to this level, it must be treated as normal. For the bright future of India, we must bear withall these consequences! Let the Rupee fall to the maximum!
Weakening Rupee
Arrjun Sehgal | Thu Aug 22 06:23:13 2013
The govt. has also stopped providing DEPB incentives to the exporters which may have discouraged exports as for some of the exporters this was the only margin they were making.
rupee crisis
Iqbal Kumar | Thu Aug 22 06:12:04 2013
Whilst the crises is partly due to FII inflow/outflow and trade deficit, I feel the real culprit is government's inattention to wasteful spending at home. The financial leakages in various sectors and schemes due to corruption is the root cause. Almost everyday for the past year there has been one scam followed by another. Today it was fake LTC claims by govt./psu employees, with crores siphoned off by fake travel and inflated bills - such as airline tickets etc. In everyday life unless these scams are checked the budget deficit will continue to grow - and what is the govt's. remedy for these ills- higher taxation, which indirectly sucks money in from the pockets of individuals and into the pockets of babu's. If this money were to come into circulation the economy would stabilize as there would be spending power in the hands of common man and would push the consumption higher. manufacturing would follow to keep pace with the demand. Economy would flourish. Bottom line- stricter laws and punishment for embezzlement and corruption at all levels - starting from the policeman who pockets fines collected from erring motorists/two wheelers. Put them behind bars and throw away the key.
I don't see long term vision
Ajeet Guruji | Thu Aug 22 05:55:45 2013
As I understand, out flow of FII and FDI is the largest reason apart from improving US economy. You can not stop FII/FDI taking there money back, they are not here for charity, rather, our industries should be encouraged to invest in overseas ventures/assets so that a regular in flow of cash is ensured for future. Instead, they are being discouraged for overseas ventures.
I am not an economist, but I now remember Indian black money in foreign banks, isn't it a big way of cash out flow? I may be wrong, but I think, govt.should give a chance to re-enter these money in to Indian economy by "not" asking source of this money for a limited period. I remember, this type of scheme was run in past by IT department.
We son't need subsidies , just give transparency
BHAVESH | Thu Aug 22 05:54:38 2013
This politicians will make India bank corrupt by all this policies. We Indians don't need all this subsidies , just give enough transparency and freedom to the industry. Employment generation is going negative, industries are facing hardships from govt policies, reg. power, finance, labour, clearances etc... , no one is ready to see at the industries only farmer only vote bank politics is going on. Who is getting one rupee per kg rice, when you decide minimum support price of paddy as 14-15 rupees per kg. They are wasting tax payers money. As they are giving all this subsidies let them sacrifice their 25% wealth as subsidy all the poor will be wiped out from the country.
Solution to $ - Rs crisis ?
P.S. VCenkat | Thu Aug 22 05:16:08 2013
The following are the solutions, which will bring $ value around to Rs 55/ i.e
1) Restrict/Ban all imports except oil/medicine/technology spares (maintenance) not new one for one year minimum. ( ensure to reduce min 70%)
2) Give incentives to exporters like exemption from Income tax /single window clearance etc.
3) Ensure to bring down the present expenses over petrol/diesel etc to 40% by implementing
Strict order and ask the eligible person to manage by two wheelers or their own expenses etc.
4) Scrap the NREGA & Food Security bill and instead generate employment to those
who are physically fit through the present system to the regd contractors/farms labour reqt etc
in ward/Zilla/District wise etc.
5) Exempt the income tax on FD, irrespective of interested earned.
6) Bring Gold regulation (control) act or rule, by which any ornament above 4grams except Mangal sutra should be valid only by the ownership card (to be issued by bank – think unique) . This card should be validated for the purpose of pledging in bank/theft report/sale purpose. Any individual who possess gold should have Gold card in his possession linked with in PAN NO, irrespective of income. Also dowry harassment/bride’s pride and ownership/theft can be stopped .
Gold is the main culprit in manipulating the $ value and as well many issues.
This regulation will bring down the gold demand automatically and the price will
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Re: Solution to $ - Rs crisis ?
PROF RAM | Thu Aug 22 08:20:53 2013
REDO THE FTA.....STOP IMPORTS OF ORANGE JUICE FROM THAILAND..........THERE IS UMPTEEN ITEMS IMPORTED AND WE LOSE MONEY....THE WHOLE WORLD WANTS FTA WITH INDIA....THEY ARE NOT STUPID WE ARE
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Knee jerk reactions , cannot solve such a crisis
Niraj Gupta | Thu Aug 22 04:56:55 2013
Hello Chidambaram and MMS. How about :
- bringing in GST. Surveys have shown a 1% increase in GDP, if this is implemented.
- repair roads & other infrastructure.
- take advantage of the low Rupee and genuinely support manufacturing sector exports.
- STOP STOP subsidizing, for heavens sake!...nothing ever reaches the needy!
- read today's headlines...the farmer gets Rs. 8.00/kg for the onions and the Delhi consumer pays Rs.70.00.....surely some goons make a lot of "unaccounted" money! This is only onions, what about the rest of the goods? Why should our inputs be so bloody costly?
- tax an entity ONCE, based on revenue and not on profits; whether corporate, firm, small biz or professional. Give sops for over x% growth Y-O-Y.
- Do away with multiple levels of taxation: Sales Tax, Income Tax, Central Excise,State Excise,Octroi, Service Tax, Surcharges....just because 28 odd states cannot reach an agreement on how to divide the taxes....1.2 billion people are put thru an inefficient mess.
- with 60 odd years of inefficiency in our justice system, turn the essence of the law for the next 60 years. For all admitted cases.... "Guilty Till Proven Innocent"...watch the "alleged" criminals squirm !
Hope Modi is listening. Hope he can "Modi"fy as above.
Not support NREGA
Rajesh Kumar | Thu Aug 22 04:23:17 2013
Of course NREGA, Food security bill are playing a significant role to help fall in Rupee, some other reasons are our manufacturing sectors have fully been dependent on China be it TATA truck, or Ambani's power house or BSNL broad band equipments,computers or cell phone. These are the main exit doors to Dollar.
Our vote greedy politicians are least bothered about down fall of Great Country. Where NREGA is turning youths into "Harmkhori" on the other hand some state Govts. have made it mandatory to declare all students as passed from class 1 to 9. What does it mean ? Is it not fatal for future of students ? No RTI on politicians also indicates their intentions.
Armchair economics
Naveen | Thu Aug 22 04:01:59 2013
We ( The Urban Middle Class ) are all hypocrites. We all start crying when there is any talk of removing Subsidies on Diesel / LPG .. because it hurts us, while we happily criticise Food Subsidy / NREGA .. which, despite its flaws helps the vulnerable sections of society. Let us start a campaign to end petroleum subsidy before asking for stopping Food Guarantee or Employment guarantee schemes.
This is nothing but self indulgence armchair economics. I would suggest the author to go around Rural India before publishing such articles full of ignorance.
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Your views half baked
WK | Thu Aug 22 04:50:00 2013
Dear Naveen, I think you are taking side too fast. However I agree to some points partially. First of all, Subsidies on Diesel / LPG: When govt shoulders the burden of subsidy, they don't pay their money but ours - the tax payer's money. But still why should the rich and economically strong ones need to be given subsidies? Why not they are allowed only for economically weaker section and and public services like road and railway transport which are a part and parcel of their lives. I earn 20-40k monthly, and I can at least pay for non-subsidised LPG (6 cylinders one year) and petrol, but still I cry when petrol and LPG subsidies are gone. On subsidies, Food Subsidy / NREGA: They are good but as we all know how much corruption is there in the system. In many places, NREGA is used by political leaders to earn affection of select vote banks and in many cases money is gone to fictitious labours and political workers who don't want to work but earn. So the author is saying we need to change the mechanism. And now come to the current economic situation. Can the economy is in the right shape now - whatever the reason for this - corruption by our own government, black money, or the 10000 crore farmer loan waiver by Chidambaram a few years ago ( after which CAD has started to rise, and needless to say there was rampant corruption in the name of that waiver - farmers were hardly benefitted)? And even after that we go with these schemes, who will benefit - the government will get more votes, middlemen will earn black money and only few people who really deserve the benefits - that even depends on whom they support? One the other hand, the economy will have to pay the cost - inflation will rise, we have to pay more for buying oil and other essential commodities from other countries, rupee will fail, we will have to borrow more and more money for supporting the so called welfare schemes, and ultimately we will face the situation of 1990s. Please keep in mind that unless we have a strong economy, we cannot do good to our poor people. Of course we need to get rid of corruption, selfish politics and other negative things - but as far the economy is concerned, it is ours not the governments. We have to take a balanced view, instead of blindly supporting anyone - be it the poor or the rich.
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Re: Armchair economics
RAM | Thu Aug 22 08:23:54 2013
MR NAVEEN ....NREGA IS GOOD BUT FOR A LIMITED TIME,,,,,IN THE UK DOLE HAS CREATED A HUGE MASS OF LAZY LOUTS.........ALSO WE NEED TO CUT EXPENDITURE..........ALL GOVT OFFICIALS LTC RUNS INTO BILLIONS....NEEDED NOW......
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Call Elections Now!!!
Anand Pherwani | Thu Aug 22 03:33:33 2013
This is a rudderless ship, correcting the course of this ship is impossible, because the person who can steer does not hold the wheel and the person who does hold the wheel, does not know how to steer - Only Solution; Dump the ship or change the captain! CALL FOR FRESH ELECTIONS NOW!!!
Rupee free fall and high Inflation
Aziz Abjani | Thu Aug 22 02:59:28 2013
The only way to curtail ever rising inflation and hence control the rupee free fall is to increase the interest rates. From now on we should not be selfish to look for just industrial growth and the economy growth all the time, after all it has only added to our woes of high inflation and cost of living for the common man from last nine years straight and has just benefited and payed back to few class of corrupt people. Also we must stop speculating the rupee and demand for removing it from speculative tradings along with all the other commodities with immediate effect. Only above two measures (increasing interest rates gradually and removing rupee and all commodities from trading) will bring back life of a common man and everyone concerned with high inflation back to normalcy and will help us Indians to lead happy and prosperous life style. People with vested interests please control on your greedy nature and forgo your greediness in the interest of Secular India. Jai Hind !
Black money in swiss bank
Radhakrishnan V V | Thu Aug 22 01:20:24 2013
Why u are not mentioning the black money stacked in Swiss bank and govt not bothered to bring it back and furnish the list of the account holders...these moneys will come back during election and the economy will get boosted. Jai Hind
Rupee Fall
Devika Dayal | Wed Aug 21 23:13:08 2013
When we start manufacturing Diwali diya /candles/ lights and Holi Water guns/ colors,and Ganesha MURTIS in our own India,
Then only Rupee fall will be arrested.Politicians are selling India at a close-out price, Beware!
feedback
AMIT AHUJA | Wed Aug 21 16:31:09 2013
too little and too late!! let`s brace ourselves for JUNK STATUS.
Inflation to continue unabated & rupee against dollar to reach Rs.80/US$
Ashis mukherjee | Wed Aug 21 13:05:14 2013
In FY 12-13, our GDP was 1,01,59,884 Crores,
Estimated Fiscal Deficit was Rs.6,09,593 crore whereas during April-July (within 4 months) fiscal deficit crossed more 50% of the estimated figure and likely to reach Rs.9,15,000 crore i.e 9.00 of the GDP.
The above deficit was calculated considering only 70,000 crore on account of FOOD SECURITY BILL whereas if at all food security bill is implemented the same
would put of a burden of additional Rs.1,70,000 crore, leading FISCAL DEFICIT to Rs.10,85,000 crore (10.67%)
Where from money will come ? If at all comes through reckless PRINTING of notes, INFLATION will reach all time high rupee may not pegged even at 80 against a US Dollar, no one can stop it, not even Raghu Ram Rajan.
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Re: Inflation to continue unabated & rupee against dollar to reach Rs.80/US$
Amit Ahuja | Wed Aug 21 16:34:38 2013
I guess you are pretty optimistic still. Let's talk about 100 to a $ by April 2014??
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
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84.35
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82.60 |
UK Pound
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106.35
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102.90 |
Euro
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92.50
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89.35 |
| Japanese
Yen |
55.05 |
53.40 |
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