Indian rupee has done well, it is time now for made in India

The RBI Governor, in his address, at the book launch in Mumbai, recalled his long association with the author, Amitabh Kant, how they were in college together, and in the central government around the time when numerous new initiatives were being worked upon. The highlights of his presentation:

I would like to highlight four things.

First, I think the book represents Amitabh’s personal journey from ‘Make in India’ to ‘Made in India’. The campaign of Making in India was launched, I think sometime in 2014 end or 2015. He was, again, secretary, Industrial Promotion and Policy.

So that was ‘Make in India’, which was aspirational. It was an aspiration. It was something to be done. And today he is releasing a book called ‘Made in India’. That means that the aspiration is now gaining traction. That aspiration is now becoming a reality. So, I think it is reflective of his personal journey from an aspiration to something which is really happening today. And at a larger level, I think from Make in India to Made in India also represents the country’s transition over the last several decades, or perhaps more than a century, because he talks about de-industrialization, which happened in the pre-independence era. During the colonial rule, how de-industrialization happened. He mentions about India’s GDP being 24-25% of the world GDP and how it shrunk. He has also talked of the de-industrialization or the drain of wealth, from India as a part of the colonial administration’s strategic moves, not only in India, but also in Africa, and wherever else colonial rule existed.

So, in a sense, at a larger level, I think the book also represents a transition from colonial India, the starting up of private initiative even during the colonial India. And over the last 75 years after India became independent, how the process of industrialization has taken off.

The second aspect is what impressed me most, is that he has really captured India’s growth story, the manufacturing sector, the service sector, the new business models, the startups, the payment ecosystem, and you name it. I think he has really captured, especially, India’s growth story in the last seven and a half decades.

The third thing, which comes out very clearly in the book, what he has described as the reigniting of reforms post 2014, where he was actively participating, and I also happened to be there. And,  it was from very close quarters that he has described how the whole process of transformation, how the whole process of economic reforms and the changes that we have had, leading us to a situation where we have a direct benefit transfer facility; when other countries during the covid period, were grappling with the problem of sending cheques or how to transfer money to the people affected by Covid, here in India on  Sunday, at the Reserve Bank – we worked with the government and the Reserve Bank – we worked together, and on a Sunday at the click of one button, money was transferred to 30 crore families. So, the book also represents post 2014, how the reforms have taken place. And he has written it out of his personal experience. And that is something which comes across quite impressively throughout the book.

And the fourth aspect, which he has highlighted, is the role of the private sector. Now it is the private sector, which really must drive growth, which must drive investment and which must lead the way forward. Government must provide an enabling ecosystem. Government must carry out the required reforms in various sectors of the economy. That is the role of the government to play, to act as a facilitator, and to provide an enabling environment where private sector can really play.

When we are talking of India, ‘Made in India’, where are we today and where do we go forward? What, what next? The country’s GDP is expected to have grown by 7% last year, that is 22-23; in the current year, 23-24 we have given a projection of 6.5% from the RBI. And we are quite optimistic and fairly confident that the actual growth will be close to that.

Although international agencies like the IMF have given lower projections. But we have shared our thoughts with them, and we are fairly optimistic and confident that the growth will be close to 6.5%. You ask any entrepreneur today in various sectors, the growth momentum, the month-on-month growth. It is not just statistical that last year or year before last we had low growth. Yes, there is a statistical factor. I am not denying that there is a statistical element in that. But the momentum from month on month, also, we see good momentum.

And in fact, almost all the high frequency indicators are revealing that our analysis in the Reserve Bank shows that urban demand continues to be strong. Rural demand has started picking up and will get further support from an excellent, rabi crop. The procurement by the government has already exceeded last year’s procurement.  Private investment, capital investment by the government, government’s capex has been really very high over the last two years. And in the current year also, the budget provision is very high. That will provide lot of support to growth. Private investment, also, there are clear indications that private investment is picking up in sectors like steel, cement, petrochemicals, and several other sectors. And for the current year, our projection of 6.5%, if it materializes, India would have contributed to world growth by about 15%. In other words, 15% of the world growth in the current financial year will come from India, which it is not a mean achievement.

So, these are the factors which give us the confidence that the India story, that the Made in India, the Make in India, all these are no more mere aspirations, but they can really materialize.

As I was leaving office a little while ago, the inflation numbers came out for the month of April, and it was very satisfying to note that the consumer price inflation last month was 5 points, that is for the month of March, data released in April. On April 12th, the consumer inflation, the headline inflation was 5.7%. And the inflation number for April, which was released today was 4.7%.

In fact, I would say with good amount of confidence that the monetary policy is on the right track. And, our job in the Reserve Bank is to provide a financial ecosystem, which will facilitate the aspirations of every citizen of this country, that India should grow fast, Indians should do well, the country should do well. So as a part of this exercise, over the last few years, we have carried out significant reforms in the regulatory architecture of the financial sector, whether it is banks, whether it is non-bank finance companies, whether it is the cooperative banking sector, all the sectors that constitute the financial sector.

We have carried out the required regulatory forms. Supervision has been tightened. And over the years, despite Covid, despite the impact of the Ukraine war, one thing which we have ensured also, and some amount of luck has also helped us, is the stability of the Indian Rupee. That is something which business, the private sector and the private investors, they need it. Unless your currency is stable, investors will not feel confident to invest, whether these be investors from India or foreign investors who are looking at India as an investment destination. In fact, the Rupee is the least volatile currency. If you compare the Indian Rupee with the currencies of our peer countries, it has been over the last one year after the Ukraine war, in the last one year, it has been the least volatile currency. This year, from 1st January, the dollar has depreciated by about one and a half percent, it varies from day to day, but roughly about one and a half percent. The rupee has appreciated by about 0.9% or 1%.

No, I am not saying appreciation is good. I am not saying appreciation is good, or depreciation is good, because that is reaching a value judgement. And, an importer will say that appreciation is good, and an exporter will say that depreciation is good. So, depending on where you stand, you look at things. But as the central bank, our effort has been to ensure that the volatility in the Indian currency is contained. We have also been looking at sunrise sectors like, for example, giving boost to the FinTech sector. And, we have set down guidelines for digital lending. And we have also set up an innovation hub in Bangalore.

I think going forward, to conclude, let me say that, the Indian economy needs to continue with reforms. The reforms which have been initiated in the various sectors of the economy, not just in the financial sector, but in the other sectors, they need to be continued. We need to focus more on technology because access to technology, thanks to the fragmentation, the global fragmentation, which has taken place, thanks to the kind of geopolitics that we are witnessing today, and perhaps which may continue, even in the coming years. We need access to technology, which also necessitates that our expenditure on research and development must increase not just in the government, but also in the private sector and in the entire Indian business eco-system.

So, I personally feel that the release of a book like this at the current juncture is very timely.


A former IAS officer of Tamilnadu cadre, Shakti Kanta Das is presently Governor, Reserve Bank of India. A former Revenue Secretary at the centre, he has been a G20 Sherpa, and actively monitored the 2016 de-monetisation of the Indian Currency.



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