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Letter to BS: Almost everything seems to be going wrong on economy front

Taking knee-jerk actions, under populist pressure, has never helped any government or for that matter any business conglomerate

Business Standard  |  New Delhi 

Reserve Bank of India
FILE PHOTO: A security personnel member stands guard at the entrance of RBI headquarters | Photo: Reuters

I admire your elegantly articulated advice to the government, “Staying calm” (September 11). Your detailed list of what to do and what not to should help those in charge to, hopefully, survive through the present crisis. Undoubtedly, almost everything seems to be going wrong on the economy front. Most of our fiscal targets seem to be in danger. Only the single mantra of “staying calm” can — and will — help at this difficult juncture. Taking knee-jerk actions, under populist pressure, has never helped any government or for that matter any business conglomerate. The only silver lining is that a weak rupee can help boost our exports, which were for long under pressure due to (a) the global situation and (b) an artificially propped-up rupee. It is time to focus on this sector and ensure that nothing comes in the way of our major exports. Cutting fuel taxes, by giving in to the bandh calls by the Opposition, would not solve anything.

As suggested by you, the Reserve Bank of India (RBI) must insist that exporters bring back their foreign currency revenues expeditiously and rein in currency speculators. How exactly the RBI and the government can bring in this discipline is an issue that needs some consideration. Any decision by the RBI’s monetary policy committee to raise the interest rates could indeed be counterproductive.

Krishan Kalra Gurugram


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First Published: Tue, September 11 2018. 21:58 IST
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