Many have been prompt in reacting to the rupee’s fast depreciation and have blamed it on the UPA Government. PR managers of the Odisha CM and the likes of him turned every stone to make sure that the news reaches every necessary corner. However, I am certain that knowledgeable people are well aware that it’s not just the Indian rupee but the currencies of Indonesia, Brazil, South Africa and Turkey too have taken huge bashings from the US dollar in the last few months. The primary reason for this fall of about 13 per cent to 21 per cent is global and not domestic.
Since August 27, the tension in West Asia has been growing and that has fuelled more trouble. The fall of the Indian rupee to an all-time low of Rs 68.80 to a US dollar also has a direct correlation to the US Obama Government’s preparedness for bombing Syria.
Ignoring the global scenario and attributing the fall of rupee and the Sensex to the passage of the Food Security Bill or to the other reform policies of the UPA is not correct.
One who understands the Sensex and the bear operators should know that its celebration times for them and the bouffant operators thrive on pessimism.
The Food Security Bill has been in debate for the past few years. Its implications had already been billed into the Union Budget for the year 2013-14. There was no such crash witnessed then. In fact, the spending on the Food Security Bill would not be more than 0.3 per cent per annum.
The Government has categorically said that the fiscal deficit target of 4.5 per cent would be adhered to for the year 2013-14. Then, why is such a negative sentimentIJ
If you refer to not only the Indian but to global history, investors have always been biased against any kind of welfare expenditure. The basic psyche is that welfare schemes are bad for the capital market. But if you refer to the same history and look westward, you will find that a strong welfare framework has been a tool for a healthy expansion of capitalism.
If I am not too harsh, I will term the said rebuttal as being hypocritical. Hasn’t the Government of Odisha been facilitating welfare schemes for economically weaker sections of the societyIJ Hasn’t the CM of Odisha been riding on the UPA’s giving and reaping political dividends for himself and his political outfitIJ
I remember that large investors and the people opposing the UPA-1 had rejected the then ‘farmer loan waiver’, but the same were very happy when massive loan restructuring was implied for big business houses. The Parliament has given a thumping support to the Food Security Bill and to various other reforms which have been brought in by the UPA-2, but the opposition benches would not miss a chance to take potshots. The abyss between the political class and the capital market must be covered. In the history of mankind, the growth of capitalists has never anteceded human development index. People with the contrary mindset need to ascribe to this truth.
(The writer is a sociopolitical leader and chairman, Smt Nandini Satpathy Memorial Trust)