Deficit in trade is of greater concern than rupee, says NITI chief

Rajiv Kumar, NITI Aayog Vice-Chairman said at a press conference on Tuesday that he was more concerned about the rising deficit in trade than the falling rupee and have urged the government to push India’s export quantities. He asserted that India should thrust for propelling its over all export because its  pie share in world trade in still pretty low.

“I don’t believe in strong rupee… Rupee should remain in its natural value, some countries depreciate their currency deliberately, this is wrong. It will be very difficult for India to try and push up the rupee,” Mr. Kumar said at an event organised by industry body CII.

On August 16, the rupee fell to an all-time low of 70.32 against the mighty US Dollar. “There is a constituency that benefits from strong rupee…The constituency should be put on back foot,” he added.

Kumar also pointed out that, large and further established economies of the world like European Union, China and America do not attach much importance to fiscal deficit. They rather concentrate on policy making that would in turn make the economy robust and strong.

“Nobody is playing by rules, so we should learn to play as it suits our requirements,” he said.

Mr Kumar further said that at such a prevailing time when private investment is low, then by increasing the public spending aggregate demand can be brought up. The constituency which benefits from strong rupee needs to be put on back foot for the time being.

He said that for the interim relief in the trend of falling rupee, few revenue expenditure can be brought to zero but the main worry should be ‘escalating trade deficit’. “I think it will be much better to try and push exports, as our share in world trade is low. Even our share in services sector in world trade is lower than China’s,” he expressed.

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