Thursday, September 12, 2013

India currency weakness

India has pursued poor economic policies and one cannot really accuse the Reserve Bank of India. The entire political elite has mismanaged the Indian economy for the last 50 years. You cannot solve a crisis that is borne as a symptom of mismanagement in just five minutes or in a week. It will involve significant sacrifices and pain and I doubt that in India there is the political will to face the music.

When I went to India for the first time in 1973, one US dollar was about Rs 7 and now it is close to 70. The oil price increase has happened in the world, but of course it is magnified in India by the currency weakness.