Tag Archives | Rupee

The Indian economy at present is in the grip of a serious crisis, manifested above all in a sharp fall of the rupee and an acceleration of inflation.

The government may appease speculators by offering some blandishments in the form of a higher interest rate (may be on some specific government bonds), or some tax concessions, as an earlier government had done in 2013 when there had been a similar speculative attack on the rupee; but it will have an immediate adverse effect on the working people by cutting them out from fiscal resources or subjecting them to the recessionary effects of an interest rate hike.

The present situation however also provides a great opportunity to move away from the neo-liberal regime.

The primary cause of the rupee’s depreciation is the preference of the Indian rich to hold their wealth in the form of U.S. dollars rather than in Indian rupees.