Niti Aayog vice chairman Rajiv Kumar said on Tuesday that he was 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.
“There is a constituency that benefits from strong rupee…The constituency should be put on back foot,” he added.
The rupee on August 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 USA, China and European Union do not give much importance to fiscal deficit.
“We must shift debate out of fiscal deficit. Countries like USA, China and European Union don’t give (importance) to it… We need to move from that single, one number (fiscal deficit).
“Nobody is playing by rules, so we should learn to play as it suits our requirements,” Kumar insisted.
He said however that some revenue expenditure can be just brought to zero.
The main worry, he added, is trade deficit.
“I think it will be much better to try and push exports,” he noted.
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’.