Indian Economy In Present Conditions: As of the beginning of 2020, the rupee was worth 71.3 against the dollar, and it was in more stable condition than now.
However, by the month of March, due to the coronavirus, many countries of the world started placing lockdowns one after the other.
In India, on the one hand, the cases of corona infection started increasing gradually; on the other hand, the value of rupee steadily declined against the dollar.
While only 3 cases of corona infection were reported in India until March 1, on March 24, when a lockdown was imposed in the country, 511 cases of Corona were confirmed.
If we look at the value of the rupee against the dollar, it shows that it was 72.1 on the first March, but by the 24th of March, it steadily decreased to 75.9.
Indian Economy In Present Conditions
Unprecedented economic challenge
With the stoppage of work in the country, the economy car started to stagger.
Furthermore, after the corona lockdown, RBI said for the first time that there is an unprecedented economic challenge before the country, the commercial growth rate may remain negative in 2020-21.
Although the position of the rupee against the dollar remained almost constant since March 24.
During the month of April, the rupee weakened a little more, and its price went up to 76.8, but then by the time of May, it was 75.8.
Even in the month of June, until now, it has been around 75.0 to 75.5.
Can it be said that India’s economy will benefit from it if it remains stable in the future?
What benefit will the Indian economy have?
MK Venu, a senior journalist with knowledge of economic matters, says that due to the Corona crisis, a kind of fear spread throughout the world economy.
In such a situation, people of developing countries withdraw foreign investment and deposit it in the US Treasury.
America is a big economy, and it is believed that money will be more secure there.
It happens in times of crisis, and it is called Steps to Safety, and the same happened in India.
Yet the Indian economy has been continuously struggling with difficulties since the Corona period.
The Indian economy was grappling with demonetization then GST.
How is the progress of the rupee decided?
The price of the rupee depends entirely on its demand and supply.
Import and export also affect this.
Every country has reserves of foreign currency in which it conducts transactions.
It is only with the decrease and increase of foreign exchange reserves that the currency of that country determines its pace.
The US dollar enjoys the status of global currency, and most countries pay the import bill in dollars.
Why is the rupee weak?
MK Venu says it cannot be said that the economy was in a steady state before Corona.
In April-May-June 2018, GDP was 8.2 percent, which fell to 3.1 percent in January-March this year. This includes only one week of lockdown.
They say that if the condition of the economy improves in the next six months, then it would be better to wait to see if the rupee can strengthen.
But they believe that the situation will not improve as it seems that the corona lockdown in India was very difficult.
In such a situation, India’s economy will be back on track, and the rupee will be weak against the dollar.
Government’s first obligation
The reasons for the rise in the value of the rupee in front of the dollar vary from time to time.
Sometimes it becomes a victim of economic conditions, sometimes it is a political situation and sometimes both.
MK Venu says that in the last ten years (from 2009 to 2019), you will find that there is no significant development in the Indian economy except for two to three years.
During these ten years, the rupee has also been steadily weakening against the dollar. The value of the rupee was 48.41 against the dollar in 2009, and it was 70.39 in 2019.
PM Modi recently announced an economic package of 20 lakh crores.
MK Venu says that the whole package was to increase investment in the country, but at the moment, the situation is that the economy is going negative.
The first responsibility of the government should be to fix it first.
People say that the government’s dream of a five trillion dollar economy in five years is not going to be fulfilled.