BEHIND THE FALL
Now that we know the factors that determine the value of a currency, how does the rupee in your bank account and purse stand at present? Over the past few months, since August, the rupee has been weakening against the dollar.
"The recent fall in the rupee was mainly due to conditions in the euro zone, plunging stock markets, falling foreign investment inflows and strengthening of the dollar," says Brahmbhatt of Alpari.
"Rising fiscal deficit and untameable inflation were behind the fall in the rupee. As India runs a large current account deficit, it needs a constant inflow of dollars, which was not there. High oil prices inflated the import bill and resulted in further widening of the current account deficit, which accelerated the rupee fall," says Narne of Anand Rathi.
Every generation complains about price rise. Prices shoot up when goods and services are scarce or money is in excess supply. If prices increase, it means the value of the currency has eroded and its purchasing power has fallen.
Let us say the central bank of a country increases money flow in the economy by 4 per cent while economic growth is 3 per cent. The difference causes inflation. If the growth in money supply is 10 per cent, inflation will surge because of the mismatch between economic growth and money supply. In such a scenario, loan repayments will be a lesser burden if interest rates are fixed, as you will pay the same amount but with a lower valuation.
A fall in purchasing power due to inflation reduces consumption, hurting industries. Imports also become costlier. Exporters, of course, earn more in terms of local currency.
However, if the increase in money supply lags economic growth, the economy will face deflation, or negative inflation. The purchasing power of money will increase when the economy enters the deflationary state. If you think deflation will help you consume more and enjoy life more, you are wrong.
Unless the fall in prices of goods is because of improved production efficiencies, you will have less money to spend. If you have a fixed-interest loan to repay, your debt will have a higher valuation. Yields from fixed-income investments made before deflation set in will, of course, increase in value.
Value of Currency depends on the productivity and gold reserve of that nation. In 1947, 1$=1Rs but, then US opened doors for entrepreneurs and invested in Research and Development, by bringing all the best brain of the world in their country through immigration program. On the other hand in India Corrupt politicians divided people and ruled and looted the country through gross corruption. Thus we had to take loans and we created big debt, not for business or growth but for the survival. This way in last 70 yrs. we reduced our currency strength from 1Rs= 1$ to 66.50Rs=1$. We can change this scenario by doing exactly what US did since 1950′. and China started since 1980′. BETTER LATE THAN NEVER.
We shall speed up in entrepreneurship , R & D and thus increase GDP from 2.4 Trillion $ to 24 Trillion $ by utilizing our full strength and skills. By making the initiatives such as,
1. Make in India.
2. Startup India
3. Stand up India &
4. Skill India.
We have to go through long root and that too very fast. but the good news is we are 1.3 Billion people with 65% (Almost 860 Million almost 2.6 USA ) young population, we can do unimaginable growth if work in one direction with harmony.
Exeptional point :-
My question is right now why do you want it. Instead of going into the bitty gritty of how exchange rates are determined, I would focus on the benefit of devalued currency.
Our country is focussing on make in India which eventually envisage the country to be self sufficient and become net exporter of merchandise goods. Think from the point of view of exports more devalued the currency better for the exports.
Also, tourism plays an important role in revenue and forex generation for the country. If our currency is cheaper then we will be a more attractive tourist destination.
China is the real life example which has kept its currency artificially devalued for decades to keep itself competitive in export market.
RATE OF USD PER INR AT THE TIME OF INDEPENDANCE
When india got independence on aug 15 , 1947, India had no borrowings from USA in its balance sheet and hence 1 usd was equal to 1 INR in 1947.
WE SHOULD PURHCHASED SWADESHI PRODUCTS:-
we must have to stop buying product from foreign companies and after 6 month we will see 25 rupee will be = 1$ (Notional Estimate).
That is why am giving you the list to choose.
• COLD DRINK
Foreign- Coca Cola(Coke, Fanta, Sprite, Thumbsup, Limca, Goldpat), Pepsi(Lehar, 7up, Mirinda, Slice)
Swadeshi- Rose Drink(Sherbat), Badam Drink, Milk, Lassi, Curd, yoghurt, Chaach, Juice, Lemonade(Nimbu Paani), Coconut Water(Naariyal Paani), Shakes, Jaljeera, Thandai, Roohafza (Hamdard), Rasna, Frooti, Godrej Jumpin, etc
Foreign- Lipton(Tiger, Green Label, Yellow Label, Cheers), BrookBond(Red Label, Taj Mahal), Godfrey Philips, Polsan, Goodrick, Sunrise, Nestle, Nescafe
Swadeshi- Divya Peya(Patanjali), Tata, Brahmaputra, Aasam, Girnaar, Indian Cafe
• CHILD FOOD
Foreign- Nestle(Lactogen, Cerelac, Nestam, L.P.F, Milkmaid, Eaveryday, Galtco), GlaksoSmithCline(Farex)
Swadeshi- Honey, Boiled rice, Fruit Juice. Amul, Sagar, Tapan, Milk Care, etc.
Foreign- Walls, Quality, Cadbury, Dolps, Baskin & Robins.
Swadeshi- Homemade icecream/coolfi, Amul, Vadilal, Milk food, etc.
Foreign- Annapurna, Captain Cook(HUL- Hindustan Unilever), Kisan(Brookbond), Pilsbury.
Swadeshi- Ankur, Saindha namak(Patanjali), Low Sodium & Iron-45 Ankur, Tata, Surya, Taja, Tara.
Foreign- Uncle chips, Pepsi(Ruffle, Hastes), FunMunch, etc
Swadeshi- Bikano Namkeen, Haldiram, Homemade chips, Bikaji, AOne, etc
• KETCHUP AND JAM
Foreign: Nestle, BrookBond (Kisaan), Brown and Palson
Swadeshi- Patanjali(Fruit jam, Apple jam, Mix jam), Homemade sauce/ketchup, Indana, Priya, Rasna.
Foreign- Cadbury(Bournvita, 5Star), Lipton, Horlicks, Nutrine, Eclairs.
Swadeshi- Patanjali(Amla Candy, Bel Candy, Aarogya biscuit), Parle, Indana, Amul, Ravalgaon, Bakemens, Creamica, Shagrila.
Foreign- Aquafina, Kinley, Beiley, Pure life, Ivian.
Swadeshi- Home-boiled pure water, Ganga, Himalaya, Rail neer, Bisleri.
Foreign- Boost, Polson, Bournvita, Horlicks, Complan, Spurt, Proteinex.
Swadeshi- Patanjali(Badam Pak, Chyawanprash, Amrit Rasayan, Nutramul)
Foreign- Nestle, ITC, Hindustan Uniliver(HUL)
Swadeshi- Param Ghee, Amul, Handmade cow ghee, Patanjali(Sarso ka tel).
Foreign- Most toothpastes are made from Animal bone powder. Colgate, Hindustan Uniliver(HUL)(Closeup, Pepsodent, Cibaca), Aquafresh, Amway, Quantum, Oral-B, Forhans.
Swadeshi- Patanjali(Dant Kanti, Dant Manjan), Vico Bajradanti, MDH, Baidyanath, Gurukul Pharmacy, Choice, Neem, Anchor, Meswak, Babool, Promise.
Foreign- Colgate, Closeup, Pepsodent, Oral-B, Aquafresh, Cibaca
Swadeshi- Ajay, Promise, Ajanta, Royal, Classic, Dr. Strock, Monate.
Foreign- Hindustan Unilever(HUL)(Lux, Liril, Lifebuoy, Denim, Dove, Revlon, Pears, Rexona, Bridge, Hamam, Okay), Ponds, Clearsil, Palmolive, Amway, Johnson Baby, Vivel(ITC).
Swadeshi- Patanjali(Kayakanti, Kayakanti Aloevera), Nirma, Medimix, Neem, Nima, Jasmine, Mysore Sandal, Kutir, Sahara, Himani Glyscerene, Godrej(Cinthol, Fairglo, Shikakayi, Ganga), Wipro, Santoor.
Foreign- Colgate, Palmolive, HUL(Lux, Clinic, Sunsilk, Revlon, Lakme), Proctar & Gamble(Pantent, Medicare), Ponds, Old Spice, Shower to Shower, Head & Shoulders, Johnson Baby, Vivel.
Swadeshi- Patanjali(Kesh Kanti), Wipro, Park Avenue, Swatik, Ayur Herbal, Kesh Nikhar, Hair & Care, Arnica, Velvet, Dabur Vatika, Bajaj, Nyle, Lavender, Godrej.
Foreign- HUL(Surf, Rin, Sunlight, Wheel, Okay, Vim), Arial, Check, Henko, Quantum, Amway, Rivil, Woolwash, Robin Blue, Tinapal, Skylark
Swadeshi- Tata Shudh, Nima, Care, Sahara, Swastik, Vimal, Hipolin, Fena, Sasa, TSeries, Dr. Det, Ghadi, Genteel, Ujala, Ranipal, Nirma, Chamko, Dip
Foreign- Old Spice, Palmolive, Ponds, Gillete, Denim.
Swadeshi- Park Avenue, Premium, Emami, Balsara, Godrej, Nivea.
Foreign- Gillete, 70clock, Wilman, Wiltage.
Swadeshi- Topaz, Gallant, Supermax, Laser, Esquire, Silver Prince, Premium.
Foreign- HUL(Fair & Lovely, Lakme, Liril, Denim, Revelon), Proctar & Gamble(Clearsil, Cleartone), Ponds, Old Spice, Detol, Charli, Johnson Baby.
Swadeshi- Patanjali(KayaKanti, KayaKanti Aloevera, Kantilep) Neem, Borosil, Ayur Emami, Vico, Boroplus, Boroline, Himani Gold, Nyle, Lavender, Hair & Care, Heavens, Cinthol, Glory, Velvet(Baby).
Foreign- Rangler, Nike, Duke, Adidas, Newport, Puma, Reebok
Swadeshi- Cambridge, Park Avenue, Bombay Dyeing, Ruf & Tuf, Trigger Jeans, Lakhani, Shreelathers, Khadim, khadi, Action
Foreign- Baume&Mercier, Bvigari, Chopard, Dior, FranckMuller, Gizard-Perregaux, Hublot, JaquetDroz, LeonHatot, Liadro, Longines, MontBlanc, Mocado, Piaget, Rado, Raymond Weil, Swarovski, TagHeuer, Ulysse Nardin, Vertu, Swatch, Rolex, Swissco, Seeko
Swadeshi- Titan, HMT, Maxima, Prestige, Ajanta, Fasttrack.
Foreign- Parker, Nickleson, Rotomac, Swissair, Add Gel, Ryder, Mitsubishi, Flair, Uniball, Pilot, Rolgold.
Swadeshi- Camel, Kingson, Sharp, Cello, Natraj, Ambassador, Linc, Montex, Steek, Sangita, Luxor.
Foreign- Samsung, LG, Sony, Hitachi, Haier.
Swadeshi- Voltas, Videocon, BPL, Onida, Orpat, Oscar, Salora, ET&T, T-series, Nelco, Weston, Uptron, Keltron, Cosmic, TVS, Godrej, Brown, Bajaj, Usha, Polar, Anchor, Surya, Oriont, Cinni, Tullu, Crompton, Loyds, Blue Star, Voltas, Cool home, Khaitan, Everready, Geep, Novino, Nirlep, Elite, Jayco, Titan, Ajanta, HMT, Maxima, Alwin watch, Ghari, Bengal, Maysoor, Hawkins, Prestige pressure cooker and products of small scale and cottage industries.
• COMPUTER & TABLETS
Foreign- HP, Compaq, Dell, Microsoft, IPAD, Samsung, Motorola, Sony, LG
• ONLINE SHOPPING
Foreign- ebay, jabong, Amazon, expedia.
Swadeshi- IndiaPlaza, YeBhi, Myntra,Naaptol, SnapDeal, HomeShop18, bookmyShow, makemytrip, yatra, via, ibibo, cleartrip.
Foreign- MarutiSuzuki, Hyundai, Chevrolet, Ford , Nissan
Swadeshi- TATA, Mahindra, Hindustan Motors
CA Varun Sharma