Congress spoke to the government of Narendra Modi on Thursday about the “continuing fall” of the Indian rupee, accusing it of always being in election mode and not focusing on economic issues.
The party noted that mere explanations will not work, and also suggested that Prime Minister Modi immediately convene a meeting with experts to take corrective action in the matter.
Congress President-elect Mallikarjun Kharge said the rupee hit another record low of Rs 83 against the dollar, noting that it could prove “very dangerous” to the Indian economy.
“The (Union) finance minister said the rupee is not weakening, the dollar is strengthening. Statements alone will not work, the central government will have to take concrete steps soon,” Kharge said in a tweet in Hindi.
Congress leader and former finance minister P Chidambaram said the government “seems helpless against the relentless decline” in the value of the rupee. He said the falling rupee has implications for inflation, the current account deficit and interest rates.
“Right now, the government needs all the wisdom and experience available in the country. I have introduced a group of eminent professionals who take the country’s best interests to heart,” he said on Twitter.
“My advice to the Prime Minister is that he should immediately convene a closed meeting of Dr C Rangarajan, Dr YV Reddy, Dr Rakesh Mohan, Dr Raghuram Rajan and Mr Montek Singh Ahluwalia to consider the next steps the government can take. , the FM and the Governor, RBI should be present,” Chidambaram suggested in another tweet.
Congress leader Anshul Avijit claimed the “inept” Modi dispensation has no idea about macroeconomic management and feared the worst economic situation is yet to come.
He said the rupee is “continuing its free fall against the dollar with disastrous consequences for our fragile economy” as it has now crossed the Rs 83 mark against the US dollar and shows no signs of slowing down.
The Congress leader claimed that the rupee has fallen by more than 10 percent so far this calendar year, reaching a low of Rs 83.12. By comparison, during the UPA, the rupee stood at 58.4 rupees to a dollar in May 2014, on the eve of Narendra Modi becoming prime minister, he said.
Against the US dollar, the rupee depreciated 6 paise to a record low of 83.06 on Thursday, on the back of a strengthening overseas dollar and continued outflows of foreign funds.
“This is the proverbial perfect storm – weakening rupee, high inflation, rising unemployment, poverty and hunger. The inept Modi government has no idea about macroeconomic management as this government is always in election mode and has no focus or concern about the economic issues, we fear the worst is yet to come,” Avijit told reporters.
The congress leader said Prime Minister Modi had completely forgotten his own story when the BJP was in opposition and recalled his words on August 20, 2013, when he had said as Gujarat’s prime minister: “It is a pity that the leadership in Delhi has not cares about the security of the country, nor about the depreciation of the rupee.” “With China on our territory and inflation hit by the rupee, the irony of Shri Modi’s statement couldn’t be greater,” Avijit noted.
The congress leader also lunged at Finance Minister Nirmala Sitharaman, saying: “With her irresponsible and misleading statements, she is not ready to accept the reality of this government’s failure to contain the falling rupee.” “Her comparisons to developed countries with smaller populations and much higher GDP per capita than India are grossly misplaced.” Claiming that the declining rupee has an inverse relationship with inflation levels, according to the RBI, Mr. Avijit said that weakening the rupee by 5 percent increases inflation by 20 bps.
This is because the import of fuel, fertilizer and cooking oil in particular is becoming so much more expensive. These goods directly affect the common man and have a cascading effect on prices, he noted.
The Treasury Secretary’s outrageous comment that ‘the rupee is not moving and the dollar is strengthening’ ignores the fact that emerging economies such as Mexico and Brazil have actually strengthened their currencies against the USD during this critical period. US policy on dollar volatility is well encapsulated in former Secretary of the Treasury John Connally’s famous 1971 statement: ‘The dollar is our currency, but it’s your problem,'” he noted. .
“The finance minister, as expected, has refused to acknowledge that there is a ‘problem’ with her government’s misdirected policies and has therefore refused to act on it,” Avijit said, adding that India’s forex reserves will be cut by 15 by 2022. .4 percent are exhausted. alone with over $110 billion leaving the shores of this country.
The weakening rupee, strengthening the dollar and rate hikes in the US have also caused foreign institutional investors (FII) to pull out quickly, he said, noting that FII has invested more than $24 billion in local equities this calendar year. has sold.
(Except for the headline, this story has not been edited by NDTV staff and has been published from a syndicated feed.)