The way the rupee is going down, it seems that ‘ache-din’ belong to the US dollar while the Indian Rupee continues to have a nose-dive experience, and the more the dollar goes up, the same should indicate the bad state of affairs of the country’s economy, no matter the claims. But what is strange is that despite crystal clear numbers available, why is the Government not ready to accept that something is not going as planned and that something is malfunctioning? While we won’t accuse the Government of malice, such an attitude, where one gets to present only the bright side, side-lining the darker side which has larger implications, cannot be acceptable.
There is more to the dwindling economy of the country in the shape of the Current Account Deficit (CAD): while the rupee is setting new records by slumping down, on the other hand, the country is also witnessing an increase in the CAD. As per figures, for FY-2021-22, CAD is $189 billion , while the same was $102 billion in FY-2020-21. The numbers indicate that India is importing more and exporting less which tells up on the financial structure and has a wide range of other effects. While those who are used to giving hypes and presenting half of the figures state that India in 2021-22, executed exports worth $417 billion, they skip the part related to the import for the same financial year. To the shock of everyone, India made imports worth $ 610 Billion—pointing to a trade deficit of $193 billion.
While we understand that pandemic, Russia-Ukraine conflict, and increasing crude oil prices are the major drivers of the depreciation of the rupee, there are other factors too that need to be taken into account—these factors are mainly domestic. The flagship programs such as ‘Make in India’ could have been a game changer; however, the difference in the imports and exports does not depict the success of ‘Make in India’. The key here remains cutting down on imports, increasing exports, and improving the CAD as well as the trade deficit. It is only, when India gives more to the world and takes back little, that the country’s economy might improve; the rupee might start falling back in place and might see an unexpected improvement; and, maybe, the country might get on to the journey of becoming a 5-trillion economy.
