PM Narendra Modi takes direct charge of economic measures to avert crisis

After coming under fire over the falling prices of the rupee PM Narendra Modi has taken place just in time. Despite improving economic fundamentals warranting a much stronger rupee, India’s currency has been the worst performing in Asia. Officials (some now retired) who had revealed in 2013 that a secretive cabal headed by a prominent member of the then government was deliberately “shorting” (i.e. bringing down the value of) the rupee, say that the same group is once again active in currency markets. Their intent is to ensure that the rupee falls to as low as Rs 100 to a US dollar by this December, an objective that they are well on the way to achieving. The well-resourced cabal is being assisted by the mechanism of “Exchange Traded Currency Futures” that was strengthened during the UPA period and inexplicably has been allowed to continue even after 26 May 2014. Because they enjoy close ties and credibility with key channels within the business press, it has been easy for this group to spread (through the media) an expectation amongst the public that the rupee is in “free fall”. Those officials who have declined to join the gravy train of the cabal warn that “the sooner exchange-based currency futures get restricted in India, the better for the stability of the rupee”. They say that the ten years of the UPA period were marked by policies “deliberately designed to make it a cakewalk for global fund managers to make hot money out of markets in India”, and that “too many such policies are still being continued” by North Block, “mainly because the key officials responsible then are still in important positions now”. It ought not to be impossible for investigative agencies to determine exactly what brokerage firms and other financial agencies are involved in the ongoing operation to “short” the rupee, especially through Singapore, Dubai, London and New York, even though these centres are outside the reach of the Reserve Bank of India.