Slamming the UPA government for its move to relax FDI norms in some sectors, Chief Minister Jayalalithaa on Tuesday said it was “neither an effective nor an appropriate measure to tackle the macro-economic imbalances faced by the country.” Much more, the Chief Minister in a statement said, has to be done by way of policy initiatives to promote exports and to set right the current account imbalances.

Stating that such announcements were only a knee-jerk reaction to the problem of the falling rupee, she said a depreciating rupee contributed to inflation. The UPA government, Ms. Jayalalithaa said, appears to be acting at the behest of foreign interests and some external rating agencies that frequently threaten to lower the sovereign rating to ‘junk status.’

For the rupee to remain strong, what is needed is a concerted policy action to promote exports, curb imports of non-essential items, and to eliminate speculative trading in forex.

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