 |
| Indian rupee |
Gold at 32000 Rupees per 10 gram caused huge uncertainty for millions of workers who work in various sectors. Already thousands of jewelry shops have closed due to having no guyers.
One should not be quick to shift blame here and there towards Congress about Rupee depreciation, it is thought, as the Rupee is now traded globally and depends on the global economy. That political side is nothing to worry about, some maintain, as this is purely economics and can be easily controlled by RBI remaining in the low interest situation.
But today there 80% residential and mall space are vacant due to having no one willing to buy or rent. This has created a lot more than 10 Lakh crore "dead money." Thousands of builders are suffering from bad debts. Already some of them have even committed suicide This has a devastating impact on millions of workers in the real estate commercial and residential sectors. So this is purely politically motivated inaction by RBI Governor by not taking any proper action. No government can take any action against such recalcitrant RBI Governor who is purposely not taking proper remedial action like USA Banking Chief BEN BARNANKE did because RBI is a constitutional body like CAG .It is strange that these constitutional bodies are turning economic problems into political issues rather solving problems in economy .Govt never interferes with any RBI action as they are independent body.
It is fact that Rupee depreciation is effecting import products like oil ,pharmaceuticals and electronic sectors. The government has no control over global prices, as India importants 70% of the oil requirements from foreign sources. This can be negated by finding alternative sources of energy needed in India, like bio-fuel, solar energy and electric vehicles. We need innovation continuously to make a vibrant economy of India but never to criticize or doing politically motivated inaction by not doing any solution to the problem at the moment .
The government needs to rescue this "dead money" situation as fast as possible by taking some creative measures that include:
1. Give IT relief upto 5 lakh of principal and interest on EMI on Home Loan
2. Bring back low interest rate regime to logical 4% for home loans to clear all dead money as a one time measure
3. Bank must give liberal loans based on strict Identity card and to stand behind the logical defaulters of EMI with subsidy and offer different long- term repayment modes.
4. Builders , promoters must get cheap loans from bank at the rate of 0.02 % for 3 years repayment and 0.2% for 10 years repayment and 1 % on more than 10 years repayment. Make it a one time stimulus packages for the next 10 years . This matter should be done sympathetically and humanely, otherwise India will end up in a recession very soon.
5. Make one time measure of giving tax sops of all these 400 billion dollar black money by giving legal status for those person who are volunteer disclose of such money with no punishment and investment of 80% of such money by putting in Govt bonds or self investment and 20% will remain as cash deposit to the government treasury for withdrawal after 20 years with no interest cost
6. Bring back low tax regime for salaried businessmen and allow more to be covered by this low tax.
7. Immediately implement GST for agricultural products as 2 % and non agricultural products as 8% uniformly for entire India with 70 : 30 ratio for state and central earning system instead of present high tax regime as high as 45% for any products moved from one place to another.
Finally the most debated but seems to be real solution of containing Rupee stability is government buying back gold at the present rate, as India has the largest holding of gold in the world individually. In religious places gold is estimated to be more than 25 lakh crore Rupees .This will help all who are suffering huge debt in all the sectors to pay back the money to the lenders easily and become debt free in shortest possible time .This large amount of money generated for people will help Banks obtain more money as deposits which in turn can be loaned to all sectors who are in urgent need of money to invest . This is the only way to tame dollar as a short term one time measure '
---------------------------------------------------------------------------------------------------------------------------
Asim Boral is a freelance writer from India whose interest and knowledge in economics and politics helps us define the issues in his country and as they impact others.
