Finalyst November 2013 Issue November 2013 | Page 12

FINALYST NOVEMBER 2013 between growth and inflation, they pee cannot be attributed to actions lasting growth India should follow are not independent so their care in US as over the last year while the following three steps, firstly strengthtakers i.e. government and central rupee has depreciated by 29 per cent ening of economic base, i.e. agriculbank respectively must understand against the dollar, 23 per cent vis-à- ture and various secondary indushow to balance them and should vis the pound and 18 per cent vis-à- tries, if they can provide lucrative work together so that India can not vis euro as well (RBI:28/08/13. market to foreign companies then only develop as a good investment option but also as global market persuasion . The same can be explained in the terms of currency performance. On 28th August 2013, the Indian rupee had gone down to 68.825 against the Dollar. Why dollar rate is going up? Some of the top reasons which one can hear or see being discussed around are possible retreat of Quantitative easing by US, supply-demand forces, India’s adverse GDP growth, high inflation, high current account deficit, Volatility in markets which is causing pull out of capital by the FIIs The deterioration of India’s economas the hedging cost for unpredictable ic performance and its balance of rupee is surpassing the yield differen- payments is the cause of weakening tials that the investors look for, Oil of rupee. Liberalization has made prices and Indian import dependency India highly dependent on outside for gold and oil, impact of Euro zone money. Instead of coming up with crisis, borrowing by international measures targeting short term stabilplayers in dollars, downgrading of ity it is perhaps time to look towards Indian stocks and alleged money correcting the balance of payments laundering for upcoming elec- and in the medium term to reduce tions ,which historically , has always the country’s dependence on foreign they can certainly provide the same to Indian companies too, which must be done in competitive manner and not in protective way, which is the second s \ K?K?X?\?[^?[??HX???^K[?H\??\?X??[?]]?X]X?[H??YH[?X?HY?\???\?????\?\??[[??[??H\[?[??H?]??\??X?H?X???]?Y[???[[???ZY?X\??] ???]?X?]Y??\YH??][]K?[KH?[?[??H[????\??[???\?Y?[???H?X???[?\?]]][?[???X?KH????][??Y?\?[]\??ZY HB??][?\?HXY[??????X?[??Y\\?H??[?][??H????\??[?X[?X???^K???H???\?????]?[?[Y[?[H?XZ?\????KH\?Y??H??H?X?H[???L???