Prime Minister Manmohan Singh’s address to Lok Sabha on rupee and economic crisis.
As reported by NDTV, Manmohan Singh on rupee and economic crisis:
- The fall of the rupee has been a matter of concern, the rupee has depreciated sharply against the dollar
- What triggered sharp and sudden depreciation of rupee was markets’ reaction to unexpected external developments
- This led to reversal of capital flow to emerging economies
- Rupee has been especially hit because of large current account deficit and other investment factors
- We intend to act to reduce current account deficit
- We will be able to reduce our current account deficit to 70 billion dollars
- Inflation in India has been much higher than in advanced countries
- Correction in exchange rate was necessary to correct this
- Deprecation to some extent can be good for economy
- Foreign exchange markets have a notorious history of over-shooting. This is happening not just for rupee but also for other currencies
- The Finance Minister has clarified on this matter and I take this opportunity to reaffirm our position
- Sudden decline in exchange rate is certainly a shock but will not address this through capital control
- Value of rupee is ultimately determined by the fundamentals of the economy
- Growth has slowed down in recent months
- I expect growth in Q1 of 2013-14 to pick up as effect of good monsoon kicks in
- Government will do whatever is necessary to keep fiscal deficit at 4.8 per cent this year
- Important to control expenditure and spend carefully to cut back on subsidies that do not reach the poor
- The RBI will continue to focus on bringing down inflation
- As the fruits of our efforts materialise, the rupee will start to recover
- Indian banking sector has seen some rise in bad debt
