from http://www.x-rates.com/d/INR/USD/graph120.html
(IANAE- I am not an economist)
It wasn't long ago that the officially administered currency regime pegged the US dollar at Rs 15 and a GBP at Rs 25. The profligate borrowing to finance in-efficiently managed government projects and lack of growth of private industry/service due to all pervasive license quota raj in the late 1980's coupled with oil shocks of the first gulf war caused a meltdown. This saw the country pledge its gold reserves to meet its foreign currency needs and the IMF/WB imposed reforms and liberalization along with certain introspection on the part of the political class. The currency had to be devalued continuously over the next decade and a half to account for lack of productivity in the economy due to 40 years of mis-management, license and quota raj by the bureaucracy and lack of political interest in free market economics.
Is it not the time to let the Rupee rise and let Indians invest into the Internet, Consumer Goods, Power Generation, Roads, Housing and agriculture and not just in India but throughout the world.
rising rupee
thats a very well written peice... but dont u think.. that the rising rupee has a highly negative impact on indian exports..it does look lucrative in the beginning... but we do need to look at the other much more important side as well... exports form a major chunk of our forex reserves...
One simple solution
I think the major chunk of forex reserves is not through exports but NRI remittances and investments(FDI) into the country.
One simple solution to this I can think of immediately is to let ordinary Indians invest in the world markets. Indians are prudent investors and its not like we'll all go and lose all hoarded foreign exchange. Services and manufacturing only exports are not exactly being on top of food chain. The ordinary indians also need a say in how they want to use their money.
I think freedom of
I think freedom of investment is a great idea, especially for the people of India. But don't you think some kind of guiding force is necessary to prevent them emulating some of the downfalls of international investment?
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