Congress MP P Chidambaram has alleged that the Centre’s mishandling of the economy has resulted in the decline of the rupee, reported PTI on Saturday.
The value of the rupee has been falling consistently. It closed to an all-time low of 79.99 against the US dollar on Thursday, but rebounded by 8 paise to settle at 79.91 the next day.
“The fall in the dollar-rupee rate is inevitable given our current account deficit, inflation, increase in interest rates domestically and in the US, the outflow of foreign portfolio investments and decline in exports,” Chidambaram told PTI in an email interview. “The exchange rate must be viewed as a price. It is one of the trinity that the RBI has to manage.”
He said that the rupee will gain only when the fundamentals improve.
India’s current account deficit is projected to touch $105 billion (about Rs 8.37 lakh crore), or 3% of the gross domestic product, this fiscal year, PTI reported citing a report by Bank of America Securities. This is primarily due to the country’s growing trade deficit, the financial services company.
The account deficit is the shortfall between the money received by selling products to other countries and the amount spent to buy goods and services from other nations.
India’s retail inflation though eased to 7.01% in June from 7.04% in May, it remained above the Reserve Bank of India’s upper tolerance limit of 6% for the sixth straight month. In April, retail inflation had shot up to 7.79% – the highest in eight years.
‘Agnipath scheme shows how bad unemployment sector is’
Meanwhile, Chidambaram also told PTI that a large number of persons applying for the Agnipath scheme despite it being temporary in nature with no post-job benefits was an indication of how bad the employment scenario is now.
“Just recently, against 3,000 Agniveer posts in the Indian Air Force, there were 7,50,000 applicants,” he said. “That is an indication of how bad the employment situation is and how desperate the youth are.”
The Agnipath scheme was announced by the government in June. Under this scheme, citizens aged between 17-and-a-half and 21 years will be eligible to apply for a four-year service in the military. Of these recruits, 25% will be eligible to apply as regular personnel after they complete their four-year service.
Aspirants for posts in the armed forces have been protesting against the scheme. They are demanding permanent recruitment under the regular process and pension and other retirement benefits that are not part of the scheme.