Rupee is going down and crashing at a really high speed, as per Google today, 64.43 Indian rupees is equivalent to 1 US dollar. Now the dilemma is, i am not sure if rupee is crashing down or dollar is going up. Either way, it is we, who are incurring major losses. Of course there are other sides of the rupee crashing, which is the good side. The economic condition of any country depends on the amount of tax and money which is being circulated in the country. Of course we do believe that there is a lot of ‘black money’ in the Swiss accounts of various Indians who have smashed the nation economically but have managed to fill their own pockets. However, that is not enough, it has to go down in heredity but that fortunately doesn’t happen, karma! Now if you look at the other side of the economic drainage, the amount of black money outside the country would be approximately the same as that of the fake currency. The money keeps circulating, whether it is original or a fake one.
If government is getting smart, the printers are getting smarter. Who checks what kind of currency has been used to pay for the losses during IPL bets? Which casino will check if the currency is fake or real one? Cash keeps circulating. However, higher rate of cash means higher rate of black money, which may necessarily may-not be true but, in our (Indian) case, it is. Once there is more cash on the outside, there is very less calculation in the inside. Lesser calculation results in lesser taxes, which in turn results in less money for the government to buy gold and print genuine currencies but the world doesn’t end, if government doesn’t print, the scamster still does.
We are all affected by it. The more rupee weakens the prices of dollars will go up thus, commodities which requires import will be dealt with foreign currency at much higher rates, those rates have to be compensated by us. For example, do not be shocked if the price of petrol goes up by few rupees in coming days. On the flip side of the same coin, NRIs who are remitting money to India are getting higher returns per dollar which encourages them to send across as much as possible. More money flowing in, more white money coming up but, this amount is swiftly taken as non-taxable since this is not an income but, a ‘gift’. Donations and gifts are not charged with tax. So, for the government things are almost the same, why almost? Because when more money flows in, many things are purchased and those goods come under taxes! Another reason for fallacy of rupee are the news channels, well that is what government officials will say. It is news channels and mass media who is responsible for showing how insecure women are in our country and how law and order is always made fun of. Political intervention is like an icing on the cake where you are trying to glorify about the culture and tradition of this great country. Of-course, tourists have started getting skeptic about visiting this country, which means, lesser outer currency getting converted to Indian rupee. Forex trade has slowed down from one side. However, aspiring students who have growth opportunities are often sent abroad for studies where they have no other option than buying foreign currency at the same insane rates as they are prevailing today. People can buy domestic gold at good prices but as the market takes a 180, the prices will again shoot up. Outsourcing business will boost since the USD to INR or GBP to INR will give them more, which means, those business will end up paying more taxes too. Money keeps circulating, it is now upto the government and economist’s job to make sure that the circulation chain link in within their control.
The economical estimates and equilibrium of the nature of economy has never duped at any country into losses, even the one trillion dollar note of Zimbabwe made sure that trade continues. Moral of today’s edit is, if your business model takes in money in USD, do as much as you can and get the best of best within less possible time frames and for those who rely on INR, keep calm and keep working the prices will come back to normal. Bottomline: No matter on what side of the coin you are, everything has a tenure.
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