With the rupee fast losing value against the U.S. dollar, Finance Minister Pranab Mukherjee on Friday blamed volatility in global commodity prices for currency depreciation and said deteriorating balance of payment (BoP) situation in several Asian countries also put stress on currencies.
“In several Asian countries, except China, the BoP is under stress, which leads to currency depreciation,” Mr. Mukherjee told reporters.
Mr. Mukherjee, who is attending 45th annual meeting of the Asian Development Bank Board of Governors here, said certain fundamentals in the Indian economy have to be corrected against the backdrop of the rating agency Standard and Poor’s downgrading outlook for the country’s sovereign rating.
Mr. Mukherjee, who will assume chairmanship of ADB on Saturday, said the global issues, which have a bearing on the Asian economies would be discussed at the meeting.
The main areas of concern for Mr. Mukherjee were eurozone and Japan, as they provide a big market to the merchandise from the developing world.
“Unless recovery in Japan and Europe is fast-tracked....it will have its impact. Eurozone crisis is expected to cast its shadow...,” he said.
Mr. Mukherjee said the Asian region is still doing better than the developed countries. “We will review the world economy...the (Asian) region is one of the important contributors to the world economy,” he said. India will be hosting the ADB annual meeting next year in New Delhi.
Keywords: Finance Ministry, Indian economy
@Ravi: I am not sure FM is stupid, in fact he is one of the smartest people in this cabinet. However he is doing what he needs to do to survive. FM and PM both know what needs to be done to revive growth and attract foreign investment in India - stop reckless unproductive populist expenditure solely for the purpose of garnering votes, initiate a big bang news worthy investor friendly policy like allowing FDI in retail and sticking to that decision, allowing higher FDI in aviation and insurance sectors etc. However both PM and FM are hamstrung by madam and her anxiety about the fate of her prodigal son in next general election. Madam could care less about India's future as long as family's immediate future is secured. Add to this list is abysmal alliance management skills of Congress resulting in routinely being blackmailed by allies like TMC. I think FM's decision on retroactive taxation was out of sheer desperation to garner some revenue in the face of ballooning deficit.
Non Sense. Indian Government is completely run out of ideas for running the country's economic machine and takes the easy option of blaming international situation.
What about the policy paralysis in New Delhi Mr. Pranab? Is that also caused by international situation?
When China has a positive BOP, you need to learn them as to what they are doing better than you guys.
Please create a conducive environment for business, exports will grow and currency will get stronger. First set your own house in order before blaming the invisible international scenario.
This is such a joke. Back in 2008/9, the same Pranab Mukherjee took all the credit
for India being relatively unharmed during the global financial crisis, the reasons
cited then were that we were relatively less plugged in to, and therefore insulated
from, the global economy - which, in many ways is true. Large swathes of our
economy still remain insulated.
Now, when the rupee is taking a beating due to atrocious fiscal policies and hare
brained social agendas (not to mention runaway corruption) of this administration,
he is now blaming it on global volatility? How can you have it both ways Mr FM? More
importantly, how could India possibly have gone from "insulated" to "correlated" in
three short years? That would take a miracle.
This guy is easily the worst Finance Minister ever! He successfully will take us back to
our glorious "Indira" 3% annual growth years. Kick him out - better still, kick him
upstairs: make him President so he can cause no further harm to the economy.
There is no point in blaming. we should have made our financial systems
immune on outside forces, whatever it may be.
Stop corruption first then our credit rating will improve a lot.
Its not global volatality :P please.. u should have got more money and
more investments in ur favor as other economies are faltering and we
are a fast growing nation...!!! There should have been more $$ influx
than exit!!! Following is the problem.
1> Careless budget
2> Policies with retrograde effect to bringin taxation.
3> Stupid policies on ex-duties increasing price to the end buyer
4> Horrible state of Balance of trade and payments.
5> Pathetic state of indian politics.
Atleast bring in a policy for industrialization especially small scale
industries.
Create and give opportunity for first time entrepreneurs.
Atleast make information more available for industrialization.
government has several schemes, its the problem that people are not
aware of those.
Bring in a platform where such schemes are made known to user.
Pranab Da is telling only partial Truth. rupee volatality if more due
to high trade deficit & current account deficit due to structural
problems in Economy and mismanagement by Central & State Governments
in India.
That's called finger pointing. The honorable minister needs to look
inward and see how his governments' actions and inactions have taken
away all the confidence global investors had about India - Corruption
that delivers probably 10p per Rupee spent, GAAR and Vodaphone,
reckless spending on populist vote-getting measures, ever growing
subsidies and budget deficit. We elected them - so we deserve that.
Unfortunately, there is no party that can challenge this government -
we deserve that too!
1.RBI has to intervene by freezing 'interest rate futures' etc,in
Forex,IMMEDIATELY.As a matter of fact,BAN Derivatives in all their
forms.Legitimate users are deprived their rights by a few Speculators
of the Wall Street having Financial Muscle.
2.India should stop Crude oil import,temporarily,which will send a
message to the manipulators,that she cannot be held to ransom.
3. India should stop allowing MNCs to misuse the resources of our
nation by MNCs, till the Wall Street bankers AGREE to stop
manipulating prices of Commodities like Oil,and even Gold and Silver
suppressing them for a strong US Dollar.
It is being felt the present position is artificially created a la
1991[Mm Singh again!Deja Vu!],to usher in:-
1.FDI in retail and Aviation
2.To do away with SUBSIDIES on the diktat of the World Bank
3.Raise the prices of fuels petrol,Diesel etc which will favour
private players and THE ONLY MNC marketing Co in India,with considerable influence at the corridors of power at Delhi.
this is right
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