Govt not Ready to Accept Reality on Rupee Depreciation: Congress

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NEW DELHI – The Congress on Thursday slammed the Narendra Modi government over the weakening rupee, which has breached the 83 mark against the US dollar, citing how the Prime Minister, when Gujarat Chief Minister, had protested against the currency’s diminishing value.

Congress spokesperson Anshul Avijit, addressing a press conference said, “The Finance Minister, true to form, has refused to acknowledge that there is a problem with her government’s misdirected policies, and therefore refused to act on it.”

He alleged that the rupee continues its freefall against the dollar “with disastrous consequences for our fragile economy”. It has now breached the 83 mark and shows no signs of abating while falling more than 10 per cent so far in this calendar year and has reached lows of Rs 83.12, he noted.

“By comparison, during the UPA, the rupee was Rs 58.4 to a dollar in May 2014 on the eve of Narendra Modi becoming PM. PM Modi has completely forgotten his own narrative, when the BJP was in opposition. On August 20, 2013, the then CM of Gujarat, Narendra Modi had said: ‘It is unfortunate that the leadership in Delhi is neither bothered about the security of the country nor about the decline in the value of the rupee.’ With China in our territory and the rupee-affected inflation, the irony of Modi’s statement cannot be more stark.”

The Congress spokesperson attacked Finance Minister Nirmala Sitharaman for her “irresponsible” and “misguided” statements, and alleged that she is not ready to accept the reality of this government’s failure to control the falling rupee. Her comparisons are with other developed countries, that have smaller populations and much higher GDP per capita than India, are grossly misplaced, he said.

The falling rupee has an inverse relationship with inflation levels. According to the the RBI, a 5 per cent weakening of the rupee increases inflation by 20 bps. That is because imports become that much costlier – in particular, fuel, fertilisers and cooking oil. These commodities directly affect the common man and have a cascading effect on prices.

“The Finance Minister’s outrageous comment that ‘rupee is not sliding and dollar is strengthening’, ignores the fact that emerging economies such as Mexico and Brazil have actually strengthened their currencies vis-a-vis USD during this critical period.

“Further, the US policy regarding the dollar volatility is well encapsulated in former Treasury Secretary John Connally’s famous statement in 1971: ‘The dollar is our currency, but it’s your problem’,” Avijit said.

He said India’s forex reserves have depleted by 15.4 per ccent in year 2022 only with more than $110 billion having left the shores of the country. “Our current account deficit (CAD) has reached 2.8 per cent, and is expected to rise well above 3 per cent.”

Former Finance Minister P. Chidambaram had also criticised Sitharaman.

“Indian rupee is not weakening, but the dollar is strengthening, said the Hon’ble FM, In aid of the weakening-strengthening argument, the government has burned $100 billion in the last year, I suppose it is a small price to pay to keep the smile on the Hon’ble FM’s face,” he said. -IANS

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