Narendra Modi today attacked the government for the free fall of rupee , as it continued its slide and slumped to a record low today, breaching the 64-mark against dollar. He argued,"The country is disappointed today because the government is neither concerned about the economy nor the falling rupee the Centre for "saving its chair" and not the economy."
More astonished with Congress leaderships silence, Modi said,"We never thought such a huge economic mess would be created. It's a grave concern and reflects lack of confidence in the leadership," .
Rating agency Moody's said that India is at the lowest investment-grade sovereign rating. The agency pinpointed that while the rupee depreciation was a new variable for the economy, the factors underpinning it have been incorporated in its investment grade rating for India.
High Current Account Deficit is the main reason that has continuously impeded all efforts of government in arresting the fall of rupee. India posted a record current account deficit of 4.8 percent of GDP in this March,and in spite of such precarious condition the Government’s subsequent failure to explore new ways has led to poor growth of exports.
Despite all the decisions to allow major reforms in India, the government has failed to tap major FDI inflow in the country. Instead, India has witnessed withdrawal of major projects by global giants, as even the overseas investors have pulled out nearly $ 3 billion from the Indian capital markets in July 2013 only.
The government lacked cohesive policy efforts , with internal bungling of coalition alliance politics and non supportive opposition making charge of unsolved corruption cases and nepotism led to lack of confidence in the government by the investors. Further inordinate delays in decision making, land acquisition problems, government agencies' clearance delays, lack of promptness have all contributed to the withdrawal of major foreign investors, while last year Indian companies spent more overseas than Foreign Investors in India.
Rising import bill, with major contribution from gold and oil, curtailed government’s effort to tackle the fall of rupee. A restriction on Gold,which contributed more than 10 percent of the total import bill, was too late and too little.
The poor to dismal economic growth in the manufacturing with industrial production in June contracted by 2.2 % , agricultural and mining sector has badly dented investor sentiment and they have become wary of investing in India.
This is a reflection of persistent slowdown, with rising unemployment along with contrasting rising inflation, reducing savings growth, reduced hope with no new investment , low investor confidence with consistent policy paralysis.
Yes the thought, advice, caution and anger of opposition party BJP's leader Modi is heartening and nationalistic, but again this is only our India not USA, where opposition bills and advice or opinion are accepted in true sense and legislation are made. But here the political leaders cannot sit together and talk for one hour even in Parliament. How one can hope that one leader will sermon another leader and he will accept that , when most are playing pure vote bank politics nearer to the election, when every one is planning how to downgrade the opposite competitor in the eyes of public. No advice will be accepted with open heart.
The question is that the ruling party Congress' leadership consisting of Economist Prime Minister Manmohan Singh ; UPA chairperson Sonia Gandhi ; Learned Finance Minister P Chidammberm and Planning vice chairman Aahaluwalia accept the seriousness of the ever rising economic mess; are they have sufficient time, opportunities, will and motivation to handle this serious crisis, as the resolution of this may effect the future of Indian economy and people for considerable period of time in near future. There are serious doubts being casted by the Indian intellectuals, socialists, economists and of course the politicians .