Depreciation of Indian Rupee is a cause of concern, say experts

The depreciation of the Indian rupee against the US Dollar is a cause of concern for the country and its economic growth. If steps are not taken to appreciate the value of the Indian rupee in the global market, it may put India into a deep economic crisis, as over 75 per cent of the global trade is done in the US dollar.

This was the observation made by the experts at a discussion talk on ‘Depreciation of Indian Rupee and its implication on Indian economy, organised by Society for Integrated Development and Research (SIDAR), at Dr. Lankapalli Bullayya College, here on Saturday.

Speaking at the seminar, the president of SIDAR and former Chancellor of RGUKT, Prof. K.C. Reddy said, “It is surprising to see the Indian rupee depreciate, especially when the inflation is around 1 per cent, the economic growth is hovering around 7 per cent and the bank balance sheets are cleaned up.”

“The decline of the rupee will make imports expensive and exports cheaper. More importantly, the increase in tariffs by the Donald Trump-led U.S.A. government will impact our trade and the balance of payment status,” he pointed out.

Prof. Reddy also said that not only the Indian rupee but also the Chinese currency has fallen when compared to the USD. However, the Chinese exports have not fallen, as its manufacturing sector is doing very well.

He pointed out that there should be more equity investments. The net FDI has been declining over the last year, and it is surprising to see wealthy Indians investing more in foreign stocks.

Correspondent and secretary of Bullayya College, G. Madhu Kumar, said that to handle the situation, the focus should shift towards manufacturing high-quality products and increasing their demand in the global market.

“MSMEs should be given a fillip and made labour-intensive. At the same time, we should modernise agriculture as the sector has always been our core focus area,” he said.

“Self-sufficiency in all sectors is the need of the hour. Our manufactured products should be made indispensable just like the Chinese products,” said Mr. Madhu Kumar.

He cautioned that emerging economies such as Vietnam and the Philippines are a challenge to India.

Presiding over the meet, Prof. V. Balamohandas, former Vice-Chancellor of Acharya Nagarjuna University, noted the dramatic shift in the exchange rate from ₹3.3 in 1947 to the ₹92 at present.

Prof. D. Harinarayana, vice-president of SIDAR, also spoke.