The Hindu Business Line : Rupee has risen too fast: Rahul Bajaj

New Delhi, Dec. 2Reiterating what Indian industry has been saying all along, Mr Rahul Bajaj, Chairman, Bajaj Auto, and MP, said that he was concerned that the rupee had appreciated too fast. Assessing the rupee’s rise from the perspective of the real, the political and the financial economy, Mr Bajaj asserted the need for a level playing field and fair competition for Indian industry.

Addressing a session on ‘The rupee’s rise: time to worry’ at the India Economic Summit here, Mr Bajaj emphasised that it would not be correct to allow the real economy to suffer due to inflows of short-term foreign money. “Till the rupee situation gets better there should be control on what money comes in or the real economy will suffer,” he said.

Mr Gerard Lyons, Chief Economist and group head, global research, Standard Chartered Bank, UK, said that he expected the rupee to further strengthen in the coming years. He elaborated that there were some imbalances within India which were due to supply side issues such as infrastructure and bureaucracy. India, he said, needed to think about the rupee not just against the dollar but against a whole basket of countries.

Currency handling

Mr B. Ramalinga Raju, Chairman, Satyam Computers, said that strengthening of the rupee due to reasons such as capital inflows was a matter of serious concern. Mr Suman Bery, Director-General, NCAER, said that it was not time to worry as yet. India’s handling of its currency had been better than that of China’s, he said. The session was chaired by Mr T.N. Ninan, Editor, Business Standard.

In the opening session of the day, with the theme ‘Will regional politics reshape the Indian economy?’, Mr D. Raja, MP and national secretary, CPI, opened his remarks saying that a newspaper had written that he was a communist Raja with an imperial name, to a huge titter from the audience.

Commenting on coalition governments, Mr Raja said coalitions need to confine themselves to the limited mandate they have and not go beyond; if it does there will be problems, he said.

Mr Vilasrao Deshmukh, Chief Minister of Maharashtra, in his address said that regional political parties represent the aspirations of the various regions of the country and are vehicles for national parties to reach out to people.

Coalition myth

Mr Abhishek Singhvi, MP and national spokesperson of the Congress party, said that India’s experience with coalition governments had dispelled many myths. One of the myths busted was that the country cannot have good growth with coalitions in central and state governments.

The existence of coalition governments meant that the government had to backtrack on certain issues of importance while on others such as airport liberalisation and the interest to be paid on provident funds it stood its ground despite opposition from its partners.

Mr Arun Jaitley, general secretary, BJP, warned of the dangers of more powerful regional parties to national government. Most of these parties, he pointed out, were caste-based, their level of accountability low, and succession tends to be built from within.