The stock market rally towards the end of October gave a clear signal that India has now clearly emerged as a major economic global player. On October 30, the Bombay Sensex crossed the 13,000 mark eve
November 11, 2006 (Press Release) --
The stock market rally towards the end of October gave a clear signal that India has now clearly emerged as a major economic global player. On October 30, the Bombay Sensex crossed the 13,000 mark even though it dipped almost 40 points the next day and might flip flop around, above and below or even much lower than that level in the weeks to come, but that would not change the fact that Indian corporates are ready to play big games in world trade and commerce. Their acquisitions overseas are counted not in millions of dollars but in billions. Their appetite is not satisfied by buying up some small companies, but they are ready to negotiate the biggest deals, not only in steel, but in several other sectors and go for the kill. The world is realizing and becoming convinced that India’s top and not too big companies are managed by hardcore professionals, who think big and have introduced world class concepts and skills, transparent and prudent.
The Reserve Bank has for long been trying to keep the US dollar price above Rs.45, but with the strength of the Indian rupee in global perceptions, the Indian currency gave a new dour indicator on October 30 when a dollar was sold for less than Rs.45 at Rs.44.97 or 44.98. It is bound to return above the Rs.45 level, but for once the level has been breached and in three years, the rupee has appreciated by ten per cent or more. At one time a dollar fetched Rs.50 or even 51 and the pound sterling almost 90 rupees. The pound is still above Rs 85 and the Euro above Rs.57. With the Chinese having decided, under pressure from the US, to allow their own currency to appreciate by about 1.5 per cent a year, could the Indian rupee be far behind? If in three to five years, the Indian rupee appreciates by another five rupees to the dollar, imports could become a little cheaper, perhaps by nine per cent, but global prices, as Indian prices, are rising all the time. That would mean that the inflationary impact of the import could be cushioned.
For one thing, with petroleum prices likely to rise again during the winter as the oil cartel, Organization of Petroleum Exporting Countries or OPEC, has decided to cut crude output by 1.3 million barrels to check the slide of prices below $60 per barrel, the appreciation of the rupee, would up slightly reduce the impact of higher energy prices, but that is far from certain. What, however, is being done in India to somewhat absorb the high world prices of energy is to blend refined products with alcohol up to five per cent to begin with from November 1 all over the country.
This has been done already in nine sugar producing States of the country. Another welcome action has been to import non-edible palm oil duty free for use as energy blender. The use of compressed natural gas in city transport in Delhi and some other cities and extend the use of CNG to more cities will further diminish the impact of high cost of imported energy.
Last year India managed to cut its
The Reserve Bank has for long been trying to keep the US dollar price above Rs.45, but with the strength of the Indian rupee in global perceptions, the Indian currency gave a new dour indicator on October 30 when a dollar was sold for less than Rs.45 at Rs.44.97 or 44.98. It is bound to return above the Rs.45 level, but for once the level has been breached and in three years, the rupee has appreciated by ten per cent or more. At one time a dollar fetched Rs.50 or even 51 and the pound sterling almost 90 rupees. The pound is still above Rs 85 and the Euro above Rs.57. With the Chinese having decided, under pressure from the US, to allow their own currency to appreciate by about 1.5 per cent a year, could the Indian rupee be far behind? If in three to five years, the Indian rupee appreciates by another five rupees to the dollar, imports could become a little cheaper, perhaps by nine per cent, but global prices, as Indian prices, are rising all the time. That would mean that the inflationary impact of the import could be cushioned.
For one thing, with petroleum prices likely to rise again during the winter as the oil cartel, Organization of Petroleum Exporting Countries or OPEC, has decided to cut crude output by 1.3 million barrels to check the slide of prices below $60 per barrel, the appreciation of the rupee, would up slightly reduce the impact of higher energy prices, but that is far from certain. What, however, is being done in India to somewhat absorb the high world prices of energy is to blend refined products with alcohol up to five per cent to begin with from November 1 all over the country.
This has been done already in nine sugar producing States of the country. Another welcome action has been to import non-edible palm oil duty free for use as energy blender. The use of compressed natural gas in city transport in Delhi and some other cities and extend the use of CNG to more cities will further diminish the impact of high cost of imported energy.
Last year India managed to cut its
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