Stronger Rupee is not a sign of Economic strength: CEA Arvind Subramanian

New Delhi, May 1 (KNN) India should have a supportive exchange rate policy to tackle the problem of rupee getting strong, Arvind Subramanian, Chief Economic Advisor emphasized. Elaborating on it further, Subramanian said that if the Indian currency is very strong, it becomes very difficult to open markets because there is a lot of added pressure on the Domestic Industry.

He also pointed out that there is a wrong perception out there that a strong currency is a sigh of national economic strength. “In fact a strong currency results in huge loss to the competitiveness of Industries, therefore weakens the economy” he added. Subramanian was speaking at the CII Annual Conference.

Talking to KNN, Pankaj Bansal, Director of TMA International echoed the need of supportive exchange rate. He said that the present Government is keen on inviting Foreign Investment. While that brings in investment from abroad, it has negative connotations as well, Strong Rupee being one of them.

Bansal further said that the stronger rupee is already beginning to show its bad colours on the Indian Industry.

“The MSMEs have started to incur losses. The orders we are fulfilling now of the older price rate is not going to fetch us any profit. Also it is very difficult to get fresh orders” he added.

Bansal informed that his association has approached the Chamber of Commerce seeking Reserve Banks Intervention to formulate policies to save the industries against the rupee phenomenon.

Last month, Nirmala Sitharaman, Commerce and Industry minister side-lined the concerns around strong rupee saying currency fluctuation as the ‘new normal’. (KNN/ DA)