Rupee wise, dollar foolish: Rising currency spoils fun in '07

Written by Agencies | New Delhi, December 28: | Updated: Dec 28 2007, 15:42pm hrs
India's booming economy and huge influx of foreign funds may have been a cause for celebration for many but the resultant rise of rupee against the dollar slowed export growth, leaving thousands jobless and several sectors struggling to remain globally competitive.

Though the rupee's appreciation vis-a-vis the dollar started from August 2006, it was only around May this year that exporters began to feel the pinch. Overall, the domestic currency has gained around 15 per cent since August last year.

Having achieved the 125 billion dollar export target for 2006-07, the government set sights on 160 billion dollars of exports for this fiscal. However, the appreciating rupee made the exporting community apprehensive of achieving the target.

Federation of Indian Export Organization President Ganesh Gupta voiced his scepticism on more occasions than one, stating that given the unabated rupee rise, the country would not be able to meet the export target.

"At best exports would be in the range of 135-140 billion dollars," he said, adding if corrective measures were not taken the rupee rise would result in job losses amounting to 80 lakh by end of the fiscal. Export growth slowed down from around 25 per cent in 2006 to 21 per cent in April-October 2007 at 85.58 billion dollars. In rupee terms, exports rose only 5.34 per cent during April-October this year.

Decline in the country's exports was visible from April when the growth rate slid from 23 per cent to 18 per cent in May and touched 14 per cent in June. The growth, however, showed considerable improvement in October at 35.65 per cent.