The editorial why the IMF is a
bad option (Business Line, 24 August,
2013)has well captured the present issues relating to the rupee
crisis and argued against approaching the IMF as a salve. The problems the economy
face today are because of mismanagement which can be easily corrected by making
a serious approach to some of the policy changes which have eroded the
confidence of investors in general and Foreign investors in particular. The
comparison of present economic situation with that of 1991 crisis is meaning
less just for the reason that the economy then was a closed one compared to the
vast liberalization it has since undergone and benefited in many ways which
include the appearance of Indian economy in world economic map as a fast
growing vibrant economy. No doubt, the political instability and a series of
scams due to laxity in Governance system have taken away the merits of the
economy. However, the fact that the resources are in tact and the potential to
bounce back remains strong cannot be underplayed. The slew of measures already
taken by the Government and the Reserve Bank are on the right direction and the
volatility of the rupee which predominantly comes out of undue speculation and
partly because of some erratic policies on Foreign investments cannot dictate
the market for a long time to come. The need to attract foreign funds through
NRI savings, investments in infrastructure projects and build up of the
confidence in the Governance system is, paramount along with measures to
improve the domestic savings, investments in production and supply chains. It
is not conducive to borrow any more either from IMF or other sources.
Dr.T.V.Gopalakrishnan
(This comment is in response to the editorial IMF not an option in Business line dated 24/8/13.)
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