Niti Aayog vice-chairman Rajiv Kumar has said that the weakening of the rupee is not a cause of worry as the Indian currency continues to be overvalued in terms of real effective exchange rate. “At this point there is no question of being worried or thinking of any kind of intervention as the rupee is still relatively overvalued by 5-7%,” Kumar said at a press conference on Tuesday.
He said it would be unfair to compare recent depreciation of the rupee against the US dollar with the slide of 2013, under the previous Congress-led United Progressive Alliance government, when the currency had fallen from 57 to 68 to a dollar in three months. Addressing the media on the achievements of the Narendra Modi-led NDA government and the initiatives taken by the Aayog, Kumar said that this government had inherited a declining economy in 2014 but had worked to put all macroeconomic parameters in place – low retail inflation of less than 5%, high forex reserves, fiscal deficit at 3.3% and great amount of formalisation in the economy – for it to grow faster. Kumar said the Aayog expects the economy to grow 7.5% in the current financial year and at 8.5-9% in four years from now on the back of strong fundamentals.
“All of them (macro parameters) will give us sustained growth over a period of time including 7.5% in FY19,” he said. However, he cautioned that “Trump tantrums” were leading to some de-synchronisation in the global economy. The NITI Aayog, the country’s premier policy making body, has been working on a strategy document to lift economic growth to 8.5-9% by 2022 and sustain it thereafter.
Kumar said the government is committed to turning around Air India sooner or later and a fresh thinking is at work at the top level on how to go about it. The government’s attempt to divest 76% stake in the ailing national carrier did not yield any results as there were no takers on the terms offered.
The NITI Aayog vice-chairman expressed confidence that the government will meet this year’s disinvestment target of Rs 80,000 crore or may even surpass it. “DIPAM (Department of Investment and Public Asset Management) is in advance stage in strategic sale of 12 companies out of over four dozen sick and loss-making CPSEs identified by the Aayog,” he said.