One of the major concerns of India in recent times has been the continued devaluation of the Indian National Rupee with respect to the US Dollar. However, of late, it has gone past the 61 dollar statistic, which was more than its previous highest. The performance of the Indian share market has also been comparatively better with international investors pulling their weight and both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) have performed to their best. Yet another encouraging sign for Indian economy has been a huge reduction in the current account deficit of India for the 3rd quarter of the 2013-14 fiscal.
India’s macroeconomic condition has been improving as well. The manufacturing sector has been performing better since February and there has also been some improvement in the service sector. Experts, however, are regarding the development as a marginal one. As per the estimates provided by Sugandha Sachdeva, who serves as the AVP and Incharge of the Metals, Energy and Currency Research division of Religare Securities Limited, the foreign institutional investors have put in almost 484.2 million US dollars in buying Indian equities in the ongoing financial year. She has also added that one of the major reasons for this significant investment by the FIIs is that they are expecting the government to change hands after the ensuing assembly elections.
In fact, global conditions, too, have contributed to this present scenario in which the national economy finds itself. The tensions between Russia and Ukraine have eased and this has meant that investors have shown a penchant for currencies from emerging markets such as India. This is inclusive of the domestic units as well. India has also been the leading performer among emerging markets ever since Rajan assumed the post of RBI Governor. Since September 2013 it has grown by almost 8%. However, the question that needs to be asked here is how long would this situation be there, considering the volatile nature of the international finance markets?
Experts such as Sachdeva opine that INR will be around the figure where it is now and will stay in that position for a short period in the foreseeable future. However, she has also added that in spite of the present positives there are still some concerns regarding the growth prospects of Indian economy. According to her, if the INR is unable to break the 61 mark it will be hard for it to increase in terms of value.
From a common man’s perspective thought, it is doubtful if such developments are of much consequence. What the normal working class understands is price and as of now prices of essential commodities, like food, are hardly showing any signs of abating. Transport and access to health and educational facilities have also become costlier and jobs are hard to come by.
Karl Marx, a noted economist and sociologist, had stated many years back that until and unless the base or the poor people can be given strength or a decent standard of living it will be hard to build a superstructure. Borrowing from him, it can be said that till our disadvantaged classes and rural folk live in better conditions than they are doing now, our economic developments in the world of business would only remain superficial at best, with little consequence for the greater good.