Trade Deficit Greater Concern Than Rupee, Niti Aayog Chief Says
Niti Aayog Vice Chairman Rajiv Kumar said he is more concerned about the rising trade deficit than the falling rupee, and called for efforts to push exports.
He also said that there is a constituency which benefits from strong rupee but it needs to be put on the back foot.
“I don’t believe in strong rupee. It will be very difficult for the government to try and push up the rupee,” Kumar said at an event organised by industry body CII in New Delhi. “There is a constituency that benefits from strong rupee. The constituency should be put on back foot,” he said.
The rupee on Aug. 16 had slumped to a life-time low of 70.32 on strong demand for the US dollar. Kumar further said that economic policy making should not focus only on fiscal deficit number, arguing that large economies like the U.S., China and European Union do not give much importance to fiscal deficit.
“Nobody is playing by rules, so we should learn to play as it suits our requirements," said Kumar.
He said, however, that some revenue expenditure can be just be brought to zero. Kumar argued that under the current circumstances, tightening fiscal and monetary policy at the same time would be asking for trouble. He also suggested that India should not boast of being a big economy while negotiating trade deals as the country's per capita income is still low.
He said Niti Aayog will soon come out with development agenda for 'New India 2022'. “We would like Planning Departments of State governments to work as State Niti Aayog,” he said.
Kumar said nearly all states except four, have signed a memorandum of understanding with the Centre for implementing Ayushman Bharat Healthcare Scheme, replying to a query. “I met West Bengal chief minister Mamata Banerjee, she is also willing to come on board,” he said.