The Indian Rupee has dipped to an all time low making new world record of weakness. It breached the psychological barrier of 60 to dollar. The rupee has fallen 56% since 2008 and 35% in last two years which is the main reason of stag-inflation in India but which is out of knowledge of our prime minister.
There is good news from RBI that the current account deficit-the excess of spending overseas than earnings-fell to 3.6% of the gross domestic product(GDP) in the March 2013 quarter, That's lower than the revised 6.5% in the December quarter, limiting the fiscal year deficit at 4.8% of the GDP.
Now you would have read a lot on how the fall in Indian Rupee would hurt the economy and imports and companies. But many would be wondering as to how this fall would affect them as individuals.
The fall in the Rupee actually has quite a big impact on us as our current account is in deficit due to puting our economy on import since the inception of UPA government in the center. We are importer of oil, fuel, fertilisers, defense arms, palm oil, pulses, electronic goods, cars, consumerable goods etc as these all will go up which will pinch and further cut the pocket of cash straped common men but will enrich the richer who export the goods.
"It is my perception of doubt that the government is intentionally allowing rupee to fall so that the price of gold could be kept constant and could not fall in India because most of corrupt people have kept their black money in gold. If you check and see broadly, you shall find that both the rupee vis-a-vis gold in international level has fallen by nearly 40% so as not to allow the losses to black marketers in gold investment abruptly".
For the starters it has a big impact on our travel plans. As the rupee falls overseas trips would naturally become more expensive. But the fall in rupee impacts our day to day lives as well. You see India is largely an importing nation. Our imports outweigh our exports. Amongst the things we import, the most crucial is oil. As rupee declines, our oil bill goes up. This would have a direct bearing on the fuel costs in the country. And needless to say that fuel is actually a lifeline for our economy.
The students who have been studying in the foreign their parents will have the shell off more money to transfer the dollars from the target fees and expenditure and this will make their life more cumbersome in India.
If fuel costs go up then everything that depends on fuel, would also see prices going up. This means that transportation becomes more expensive. If transportation becomes expensive then the cost of our groceries and food items goes up. As prices go up, we would again be gripped by the monster of inflation which would burn a hole in our wallets.
On the other side, a fall in rupee has a negative impact on our investments as well. The stock markets tend to have a knee jerk reaction to a steep fall in rupee. As such these are very short term issues. But the bigger problem is that related to FIIs (Foreign Institutional Investors).
A fall in rupee affects the dollar value of the FIIs investments in the country. Therefore such declines tend to pur fear on them them and this leads to an exodus of money from the India.
As such a fall in the Indian Rupee is not good news either for the economy or for the corporate world or for us individually. It messes up everyone's budgets and lives. The Reserve Bank of India (RBI) has interfered in the foreign exchange markets time and again to help the rupee.
Fortunately, the Rupee recovered a bit today on the back of good news on the current account deficit as it dipped to 3.6% of GDP. But this is could be just a momentary breather for the Rupee because for the last 3 years government of India has totally failed on all fronts but succeeded in enrolling numbers of scams. There are several structural issues that have gripped our economy that have lent weakness to the Indian Rupee.
In 1983, the parity rates was 9.75 per dollar, in 1991, the Rupee was devalued by 11.3%, bringing the rate to Rs25.95 per U.S. Dollar. Now, the rupee against dollar has devalued to 55. That means you shall have to pay rupee 55 to buy one dollar which you was paying earlier only rupees 9.75 before 1991.
Something strange is happening in India's external economic relations. The rupee has found itself a new low level in relation to the US dollar and the British pound, and seems likely to depreciate even further. A year ago, the Indian rupee stood at a then strong Rs 44.5 to the dollar. At that level, the rupee had appreciated by more than 13 per cent vis-a-vis the dollar over the preceding 13 months.
" PM Manmohan Singh wrong economical policies has made us so cheap as compared to USA economies or others economy of the world-that to buy one dollar we have to shell off 62 rupees that means our economy is 60 times weaker than USA economy".
"It is a matter of concern that the trade deficit which was $183.4 billion last year has increased to $190.91 billion. According to data released by the commerce ministry, crude oil, which is a major component of India's imports, grew by 9.22 percent at $169.25 billion from $154.96 billion in 2011-12.while gold's import has become a major head for "Current Account Deficit" which is not only unproductive but a investment source for black marketer.
"One should be astonished to know when there are are 3% who pay Income Tax than who are brothers and fathers of UPA government who are buying nearly 54000 Cr of gold each year which are being allowed to import which is putting illegal pressure on rupee to free fall and have become curse for common men by increasing price of imported materials". Is there any check for that??
The imports increased by a marginal 0.44 percent to $491.48 billion from $489.31 billion in 2011-12, leaving a trade deficit of $190.91 billion, an increase of 4.12 percent, from $183.35 billion in 2011-12. There is more stress to increase import than to increase export
The onus of helping the Rupee in the long term now lies on the government. They have to make policy changes and control the deficit problems.
"There is urgent need to control the imports and, instead of an import oriented economy which Manmohan Singh developed by his wrong policies decision, now the government of India must find ways to convert it into an export oriented economy instead of import oriented economy".
There should be sale of gold through banks only to jewelers or goldsmiths against PAN number and though their acount only. Because gold has become a investment heaven in India for black economy players being allowed by GOI".
At the same time the government also has to take the necessary steps for boosting investor confidence in the country. These steps should help the Rupee stabilize in the long run. But will the government act on this front or would it prefer to spend time on trying to win the next general elections, time to see?
_________________________________________________________________ "Democracy means- A government of the people, by the vote of the people, by the money of the people, and for the welfare of the people". Thanks
The unfortunate matter of concern for India is that the rupee has totally lost its value with regard to dollar currencies in the basket due to wrong policies adopted by prime minister Manmohan Singh because the appreciation or depreciation of rupee has become directly proportional to fall and rise of share market, and in case, if ever market falls below 12000 than the rupee parity vis-a-vis dollar may cross to 85 rupee per dollar. "You can well imagine the atrocities and agony being on middle class, peasant, transporters, poor for its depreciation".
There is good news from RBI that the current account deficit-the excess of spending overseas than earnings-fell to 3.6% of the gross domestic product(GDP) in the March 2013 quarter, That's lower than the revised 6.5% in the December quarter, limiting the fiscal year deficit at 4.8% of the GDP.
Now you would have read a lot on how the fall in Indian Rupee would hurt the economy and imports and companies. But many would be wondering as to how this fall would affect them as individuals.
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"It is my perception of doubt that the government is intentionally allowing rupee to fall so that the price of gold could be kept constant and could not fall in India because most of corrupt people have kept their black money in gold. If you check and see broadly, you shall find that both the rupee vis-a-vis gold in international level has fallen by nearly 40% so as not to allow the losses to black marketers in gold investment abruptly".
For the starters it has a big impact on our travel plans. As the rupee falls overseas trips would naturally become more expensive. But the fall in rupee impacts our day to day lives as well. You see India is largely an importing nation. Our imports outweigh our exports. Amongst the things we import, the most crucial is oil. As rupee declines, our oil bill goes up. This would have a direct bearing on the fuel costs in the country. And needless to say that fuel is actually a lifeline for our economy.
The students who have been studying in the foreign their parents will have the shell off more money to transfer the dollars from the target fees and expenditure and this will make their life more cumbersome in India.
If fuel costs go up then everything that depends on fuel, would also see prices going up. This means that transportation becomes more expensive. If transportation becomes expensive then the cost of our groceries and food items goes up. As prices go up, we would again be gripped by the monster of inflation which would burn a hole in our wallets.
On the other side, a fall in rupee has a negative impact on our investments as well. The stock markets tend to have a knee jerk reaction to a steep fall in rupee. As such these are very short term issues. But the bigger problem is that related to FIIs (Foreign Institutional Investors).
A fall in rupee affects the dollar value of the FIIs investments in the country. Therefore such declines tend to pur fear on them them and this leads to an exodus of money from the India.
As such a fall in the Indian Rupee is not good news either for the economy or for the corporate world or for us individually. It messes up everyone's budgets and lives. The Reserve Bank of India (RBI) has interfered in the foreign exchange markets time and again to help the rupee.
Fortunately, the Rupee recovered a bit today on the back of good news on the current account deficit as it dipped to 3.6% of GDP. But this is could be just a momentary breather for the Rupee because for the last 3 years government of India has totally failed on all fronts but succeeded in enrolling numbers of scams. There are several structural issues that have gripped our economy that have lent weakness to the Indian Rupee.
In 1983, the parity rates was 9.75 per dollar, in 1991, the Rupee was devalued by 11.3%, bringing the rate to Rs25.95 per U.S. Dollar. Now, the rupee against dollar has devalued to 55. That means you shall have to pay rupee 55 to buy one dollar which you was paying earlier only rupees 9.75 before 1991.
Something strange is happening in India's external economic relations. The rupee has found itself a new low level in relation to the US dollar and the British pound, and seems likely to depreciate even further. A year ago, the Indian rupee stood at a then strong Rs 44.5 to the dollar. At that level, the rupee had appreciated by more than 13 per cent vis-a-vis the dollar over the preceding 13 months.
" PM Manmohan Singh wrong economical policies has made us so cheap as compared to USA economies or others economy of the world-that to buy one dollar we have to shell off 62 rupees that means our economy is 60 times weaker than USA economy".
"It is a matter of concern that the trade deficit which was $183.4 billion last year has increased to $190.91 billion. According to data released by the commerce ministry, crude oil, which is a major component of India's imports, grew by 9.22 percent at $169.25 billion from $154.96 billion in 2011-12.while gold's import has become a major head for "Current Account Deficit" which is not only unproductive but a investment source for black marketer.
"One should be astonished to know when there are are 3% who pay Income Tax than who are brothers and fathers of UPA government who are buying nearly 54000 Cr of gold each year which are being allowed to import which is putting illegal pressure on rupee to free fall and have become curse for common men by increasing price of imported materials". Is there any check for that??
The imports increased by a marginal 0.44 percent to $491.48 billion from $489.31 billion in 2011-12, leaving a trade deficit of $190.91 billion, an increase of 4.12 percent, from $183.35 billion in 2011-12. There is more stress to increase import than to increase export
The onus of helping the Rupee in the long term now lies on the government. They have to make policy changes and control the deficit problems.
"There is urgent need to control the imports and, instead of an import oriented economy which Manmohan Singh developed by his wrong policies decision, now the government of India must find ways to convert it into an export oriented economy instead of import oriented economy".
There should be sale of gold through banks only to jewelers or goldsmiths against PAN number and though their acount only. Because gold has become a investment heaven in India for black economy players being allowed by GOI".
At the same time the government also has to take the necessary steps for boosting investor confidence in the country. These steps should help the Rupee stabilize in the long run. But will the government act on this front or would it prefer to spend time on trying to win the next general elections, time to see?
_________________________________________________________________ "Democracy means- A government of the people, by the vote of the people, by the money of the people, and for the welfare of the people". Thanks
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