The rupee hit a historic low of 90.21 (provisional) against the US dollar on Wednesday, raising fears of inflation. Falling rupee helps outward shipment but makes import costlier.
The next round of easing business regulations—a much bigger problem for MSMEs than for big firms—needs to be driven by states in areas of land, labour, transport, & penalties, it said.
While releasing 'India Employment Report 2024', V Anantha Nageswaran said govt can't solve 'all social, economic challenges'. Congress leader Kharge says CEA protecting 'dear leader'.
The BCCI decision has given new life to the lunatic fringe of the Hindu Right. It now has the confidence to force policy changes in accordance with its communal campaigns.
The latest comment comes as New Delhi and Washington have yet to sign a trade agreement. India’s purchase of Russian oil has reduced, but Moscow remains top source for crude.
If deal goes through, Greece will be 2nd foreign country to procure vehicle. Morocco was first; TATA Group has set up manufacturing unit there with minimum 30 percent indigenous content.
Many of you might think I got something so wrong in National Interest pieces written this year. I might disagree! But some deserve a Mea Culpa. I’d deal with the most recent this week.
The argument is that the weakening rupee is about “exchange rate” and not PPP related – which is why someone even claims that it is a “perfect medicine” assuming both economies offer “Public goods” at the same level – so PPP-wise we are ok with a falling rupee.
That base itself is flawed – the basis on which they both make their argument:
PPP calculations assume that “public goods” (air, water, safety, roads) are equal and free in both countries. They are not.
In the US: You pay high taxes, but you get clean air, drinkable tap water, 24/7 electricity, and walkable sidewalks “for free” (included in the system).
In India: You pay lower taxes (nominally), but the state provides none of these effectively. You have to buy them privately.
Air: You buy Air Purifiers (Rs 15k+ each).
Water: You buy RO filters and water softeners.
Power: You buy Inverters or Generators.
Safety: You pay a premium for a “Gated Community” to escape the chaos outside.
The Reality: Your “high PPP” savings in India are immediately drained by paying for things that are basic rights in the West. You are essentially running a mini-municipality inside your own home.
Factor in all that math when trying to treat the “exchange rate” as a medicine for the elevated tariffs.
Common sense says : if you make something at loss dont product it. Had the same tariffs been in the domestic market should the rest of India accommodate to absorb those tariffs? Then why should be slide the rupee to accommodate those export industries?
The argument is that the weakening rupee is about “exchange rate” and not PPP related – which is why someone even claims that it is a “perfect medicine” assuming both economies offer “Public goods” at the same level – so PPP-wise we are ok with a falling rupee.
That base itself is flawed – the basis on which they both make their argument:
PPP calculations assume that “public goods” (air, water, safety, roads) are equal and free in both countries. They are not.
In the US: You pay high taxes, but you get clean air, drinkable tap water, 24/7 electricity, and walkable sidewalks “for free” (included in the system).
In India: You pay lower taxes (nominally), but the state provides none of these effectively. You have to buy them privately.
Air: You buy Air Purifiers (Rs 15k+ each).
Water: You buy RO filters and water softeners.
Power: You buy Inverters or Generators.
Safety: You pay a premium for a “Gated Community” to escape the chaos outside.
The Reality: Your “high PPP” savings in India are immediately drained by paying for things that are basic rights in the West. You are essentially running a mini-municipality inside your own home.
Factor in all that math when trying to treat the “exchange rate” as a medicine for the elevated tariffs.
Common sense says : if you make something at loss dont product it. Had the same tariffs been in the domestic market should the rest of India accommodate to absorb those tariffs? Then why should be slide the rupee to accommodate those export industries?