No Reason for Panic, Says Arun Jaitley About the Falling Rupee

Meanwhile, Nitin Gadkari pitched for alternative fuels such as ethanol and methanol along with electric vehicles.

Finance Minister Arun Jaitley. 

(Photo: PTI)

Finance Minister Arun Jaitley said there is no reason "for the world's fastest growing economy to come out with panic and knee-jerk reactions" following reports of the Indian rupee hitting a new low.

At present the rupee stands at 71.79 against the US dollar.

However, while addressing the media following a Cabinet meeting, Jaitley said he’s confident that the fluctuations in the rupee will decrease.

On being asked about the dip, he said:

If you look at the domestic economic situation and the global situation, there are virtually no domestic reasons which are attributable to this. The reasons are global. We must bear in mind that in the last few months, the dollar has strengthened against almost every currency. And therefore, most global currencies have weekend viz-a-viz the dollar.

He also maintained that:

As far as most other currencies are concerned, the rupee has consistently either strengthened or remained in a range.

This he exemplified by stating that while in September 2013 the rupee stood at 101.42 against the pound, 84.47 against the euro and 0.64 against the yen, today it stands at 92.05 against the pound, 83.12 against the euro and 0.64 against the yen.

He further said there is a flow of dollars into the United States because of "certain policies."

We are net buyers of oil, and therefore, by creating shortages (in the US), oil price is temporarily raised, and that adversely impacts us.

He also said even though India is not in the trade war business, when a neighbouring country decides to devalue their currency, it has an adverse impact on India.

We Want to Reduce Imports, Increase Exports: Nitin Gadkari

Meanwhile, Transport Minister Nitin Gadkari pitched for alternative fuels such as ethanol and methanol along with electric vehicles, reiterating that the government's policy is to reduce import, enhance exports and curb pollution at the annual convention of the Automotive Component Manufacturers Association of India (ACMA), reported PTI. He said:

Our policy is very clear. We want to reduce imports, increase exports and finish pollution.

Stating that India is facing two major issues – pollution and rising imports of fuels – Gadkari said:

Import bill is increasing due to the rise in automobile sector. This is the biggest challenge facing our economy and for that we have come out with a programme.

He said a policy for import substitution would be prepared.

"Alternative fuels is necessary for us," he said, adding there was a huge potential that can be be tapped from bio-products such as molasses, cotton straw, biomass and corn to produce ethanol which can be used as automotive fuel.

Seeking to address concerns in the automotive industry over the future of conventional fuels, he said, "I am not against petrol, diesel and we are not closing any industry."

Appreciating the "change in the mindset" of auto industry, the minister said the government has already made clear its priority areas to the industry and cited example of how GST on electric vehicles was reduced to promote eco-friendly technology and combat pollution.

(With agency inputs.)