Will Dollar Push Indian Rupee to 60?

Bangalore:  Finance Minister Pranab Mukherjee finally put an end to his silence prompted by the record low of the Indian rupee (INR) against the U.S. dollar. The FM promises to take serious steps to improve government finances that will likely strengthen the economy and the rupee. But the bitter truth is even if the FM is very serious about taking measures; it will hardly help the INR.

Any strict measures taken at this point of time will work as an anti-growth and if the measures involve cutting back on vital expenditure, the INR will extend its fall. Moreover the measures taken will only push INR to 60 plus to U.S. dollars sooner than later.

It’s high time for the government at the centre to comprehend that alterations are the only option that will strengthen the economy and the INR. Improvement in subsides, improvement in taxes, alterations in PSUs and making state politicians accountable to the people are the way forward. Subsidy is the only factor that has made the government bankrupt. India’s subsidy bill in 2011-12 was the highest ever at 216, 297 crore, and this does not take into account the cross-subsidy borne by ONGC, which is over 40, 000 crore.