The diagnosis of the problem by the RBI and the Finance Ministry is completely wrong and counterproductive. It not just the current account deficit.
What you have playing out is that growth has collapsed and that is why investors are not finding Indian assets attractive. If you communicate that there is growth, there is a way out. We are not encouraging investors to invest in India. This is tragic. The only way to attract investment was to focus on economic growth.
People want to sell the rupee; they have lost confidence in policy decisions for a host of reasons.
We must encourage currency swaps with trading partners, especially with the ECB and Great Britain, to bolster foreign exchange reserves.
(As told to Girija Shivakumar)