BJP Demands White Paper On Rupee Devaluation

Describing the falling of the rupee as the darkest period of the Indian economy after Independence, the Bharatiya Janata Party on Friday demanded that the Congress-led UPA government issue a white paper on the issue, and also initiate a national debate on it.

In his open letter to Prime Minister Dr. Manmohan Singh, BJP national vice-president Bandaru Dattatreyya said that a national consensus is needed to seek recovery solutions, and that national policies need to be reviewed to avoid or anticipate such lows in future.

"The historic devaluation of the Indian rupee to Rs. 68.80 per US dollar signals the decline of the mighty Indian economy," he said.

"As an economist, you are aware that devaluation of the Indian rupee leads to inflation. In turn, inflation reduces the purchasing power of the middle class. As a result, the slowdown of demand impacts manufacturing and thereafter employment. This cascading effect reduces our growth rate and national stand in the committee of nations," Bandaru said.

The BJP leader said that the devaluation of the Indian rupee has a wide range of implications. He said that at the national level, the cost of imports would upwardly spiral, and that with oil imports being substantial, the burden would affect the cost of goods and services, taking them far beyond the affordability levels of the common man.

"The oil imports in rupee terms has increased to 5676.7 crores, according to ASSOCHAM. Similarly, the increase in the cost of imported coal and coke shall push the cost of power generation, thereby adding burden on the cost of manufacturing and on consumers," he said.

"The imported cost of vegetable oils and other raw materials for manufacturing shall make the finished products non-competitive. For instance, the global prices of vegetable oils have declined to $157.6 per metric ton, but the cost per metric ton has increased by Rs. 6941.6 per metric ton as per ASSOCHAM report," he said.

Bandaru said that the declining value of the Indian rupee would make our foreign currency debt more costly, and even dent our repayment records to the international funding agencies.

"Several high value and critical infrastructure projects could be affected due to lack of necessary funds. This in turn affects the growth of the economy," he opined.

"The youth eager for higher studies abroad will suffer as a result of the costly dollar. It is to be noted that more than 250,000 Indian students are seeking higher education abroad. In US alone, more than 47,000 students are from Andhra Pradesh. The agricultural sector would be affected due to the increase of imported fertilizers," he said. (INN)