Falling Rupee Value against US$ which is not a good sign for the economy of the country.
At present the US$ is being traded @Rs.68 – 69. The exchange rate was below Rs.45 in 2004. It means there is increase of 50% which means our Indian currency value is falling very fast during the year 2013-14. It is a more alarming state of affairs that the value of Indian Rupee falling so steeply. Though the USA economy is not doing well, its exchange value is increasing. It means that there is something we have to do to regulate and rectify our attitude and prescribe procedures for Imports. It means there is a great demand for International Exchange Currency US$ and it indicates that there are more imports than exports. It is high time to take necessary action to reduce imports.
Now it is the time to analyse which goods constitutes more of our imports which are so necessary and to what extent? According to a study our main imports are Petroleum products which constitutes major portion of 31% of imports and Gold and precious metals which constitutes another import portion 20% of our imports, luxury goods to the extent of 15%.
Our Indians has started investment in gold as safe investment and lucrative because of safety and recent increase in gold prices. Now it is the time regulate the Investment on gold, Import of Luxury goods and expenditure on utilization of petroleum products. Also, it indicates that there no proper authority to ensure safety, liquidity and reasonable Income of the other Investments made by the citizens.
At present the Govt. wants to discourage the investment in Gold with the help of restricting the Banks not to grant loans against Gold ornaments. Our finance Minister is also suggesting not to purchase gold. Instead of suggesting not to purchase gold, the Gold Imports can be reduced. This step is not sufficient. Some more informative and regulatory step is required. Also, with regarding the petroleum products, there is no restriction on spending. The same also can be streamlined and used for higher productivity.
Now it is the basic question how to regulate the investment in gold, petroleum products? It can be done with prescribing the stipulation that all the gold transaction has to be informed to the Department by giving their Income tax PAN No. So that all the investments, transactions will come to the notice of Fiscal Regulatory Authority, Income Tax Department. Also the same theory of prescribing PAN No. can be applied for luxury imported goods for proper usage to reduce unproductive usage. This step will create some kind of accountability and responsibility on the citizens of India and importance in usage of Foreign Exchange. Purchasing gold and petroleum means spending International Exchange currency US$.
It is not correct step to invite foreign investments to overcome the situation. It means that we are inviting capital receipts, which has to be repaid to meet the regular and revenue requirements. What we need is restriction on Imports and encouragement for Exports. More right situation can be to reduce imports.
