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Diksha Yadav
Apr 13, 2025, 10:16 AM | Updated 09:37 AM IST
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đ¸ Let The Rupee FALL!
Dear Listeners,
In the latest episode of What This Means, Indian School of Business Professor Dr Prasanna Tantri breaks down the RBI's latest moves, why 6.5% growth is "below potential," and why a reduction of tariffs on US imports might actually HELP India's economy.
Plus, his candid take on why established industries â not startups â deserve criticism for lack of innovation.
Listen as he explains why we should "let the rupee fall" and why RBI should now focus on improving access to credit.
Key Highlights:
Let The Rupee FALL: âWhen it comes to the issue of rupee depreciation, itâs important to understand that a lower rupee isnât necessarily a sign of economic failureâinstead, itâs a strategic manoeuvre. Think of it as a controlled adjustment similar to what China has implemented to make their exports competitive. By letting the rupee depreciate gradually, weâre not condemning our economy but rather positioning our goods more favourably in international markets."
Beyond Dollar Comparisons: "Instead of merely comparing the rupee against the dollar, the RBIâs Real Effective Exchange Rate (REEER) offers a weighted perspectiveâconsidering a basket of currencies against which we trade. Despite appearances, when you look at this comprehensive measure, you might find that the rupee has actually appreciated slightly over timeâfor instance, if it was at 100 in 2015 and now sits around 103 or 104, thatâs a 4% improvement."
Call for Structural Reforms: âLooking ahead, both the RBI and the government must undertake deep structural reforms. This isnât just about tweaking monetary policy; itâs about transforming our entire ecosystemâfrom administrative reforms and educational overhauls to making it easier to do business. Without such comprehensive changes, we risk being locked into modest growth rates, even as we justify them with global trade tension narratives."
Fintech and Regulatory Balance: âIn the realm of fintech and non-bank financial companies, we must be willing to let some players fail. Over-regulating in the name of stability can stifle innovation and competition. Instead, a system that encourages calculated risk-takingânot only through startups in deep tech but also by allowing market mechanisms to weed out underperformersâwill ultimately lead to more robust, sustainable growth.â
You can listen to the full episode on YouTube, Spotify, or Swarajya App.
Your Host,
Diksha Yadav
Diksha Yadav is a senior sub editor at Swarajya.