Business Wire India
Faced with the double whammy of increasing Current Account Deficit (CAD) as also the falling value of the Rupee in international currency markets, the Indian Government, on Friday 14 September, at a meeting chaired by Prime Minister Narendra Modi, reviewed the state of the economy. Union Finance Minister Shri Arun Jaitley, post the meeting, indicated that the steps being taken would focus on curbing non-essential imports in the weeks ahead as also steps to boost exports. He added that measures to shore up the rupee and control the current account deficit were being implemented.
For the Indian economy, it has been a tense few weeks, be it changes in value of the rupee as also movements in the equity markets. Given this, the initiative by the Prime Minister as also regulatory authorities we hope it will have the required impact.
The Finance Minister’s statement indicates that we may see curbs on non-essential imports in the weeks ahead while taking steps to boost exports, besides announcing a number of measures to shore up the rupee and control the current account deficit. I expect these measures to have a positive impact, based on Economic Affairs Secretary Shri Subhash Garg’s statement, where he quantified the impact of the measures announced at about $ 8 – 10 bn dollars.
We need to keep in mind that currencies of countries running current account deficits have come under pressure, including the Indian rupee. The global economic scenario is in a bit of a turmoil, triggered by rising US interest rates, a global trade war that may intensify and strengthening crude prices. Let us wait and watch – hopefully, things will work out positively and the CAD deficit will be controlled.
Dr. Niranjan Hiranandani is Founder & CMD, Hiranandani Communities & National President, NAREDCO.