Falling rupee, widening trade gap a serious issue: Sharma

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SME Times News Bureau | 24 May, 2012
The rupee's continued slide against the dollar is "a serious concern", Commerce Minister Anand Sharma said Wednesday.

"Increased dollar demand, especially by oil companies, is making the currency go up and down. Our oil bill is also on the higher side," Sharma told reporters in Shimla adding, "Indian exports are not going up. Our endeavour should be to boost exports."

The rupee hit a record low of 56 against the dollar Wednesday.

"I have discussed the issue with the prime minister (Manmohan Singh) and the finance minister (Pranab Mukherjee)," he said.

"There is global uncertainty and India is no exception," Sharma said. "The government is taking a series of steps. It (the rupee volatility) is more market related… Market forces are uncertain."

Sharma was here to review the central government schemes being run in Himachal Pradesh.

On a query over inflation, he said it was "a global phenomenon".

"Unfortunately, India is not self-sufficient in food grain production and has to import lots of items, including pulses. But the impact of (global) petroleum prices is mainly responsible for inflation. The RBI (Reserve Bank of India) has taken a lot of initiatives but there is a lot of pressure on the rupee," he said.

He said India was annually importing 9 million tonnes of edible oil, up to 5 million tonne of pulses and its oil (petroleum) bill was USD 154 billion.

Expressing his concerned about the growing trade deficit of the country the Minister said that his Ministry was taking steps to keep the export afloat.

"To keep export afloat my Ministry is taking steps to boost the the export and in the last two years we have met our targets. Our two-way trade has reached a mark of 788 b dollars. Now to increase it further we are holding meeting of Joint Working Group (JWG) of both government and the industry to give it a big boost and our Supplementary policy on trade will be out on July 5," Sharma added.