At around this time 3 years back, i remember paying 42 rupees per dollar for my tution fees. I look at the dollar rate today, 67 rupees per dollar. A 50% increase. Something has surely gone wrong. That something doesn't make me happy. Even though I end up getting more for every dollar i earn.
I do not want to talk about the reasons for this slide, lots of sources on the Internet do a good job of explaining them. I want to talk about this slide purely in terms of an Indian currently working overseas and what it means to him or her.
1. Send money to India
The first thing when dollar goes up is your friends start telling you India paise bhej de. Rate accha chal raha hai. Many people do that, and these things sometimes help bring the Rupee up. You can understand the rush for sending money to Ina when dollar increases from 45 to 50. But this does not hold true for a further slide in Rupee value. Here's when point 2 kicks in.
2. Credibility of the Rupee
This time around, the Rupee value drops so much that you begin to doubt it's credibility. You begin to question whether it will rise back again. You read stories about the Zimbabwe dollar slide and what happened there and wonder if that's a possibility in India.
3. Investment Dilemma
When dollar strengthens, it is easier to buy property in India, easier to invest money in NRI accounts/ Gold/ Infrastructure and lot of other things. A 70-80 lakh property is lot easy to buy at 55 rs/ Dollars instead of 50 rs/ dollar. But then you think, if wait a little longer, you might be able to buy it at 65rs/dollar and you would be better of waiting. Plus, now you reach a stage that despite property price rise, if the rupee keeps on weakening you are not going to make much if you sell it off.
4. Second thoughts about going back home
People tend to think twice before going back to India for good. The rising inflation, sliding rupee, rampant corruption, escalated working hours. When you see people in India trying to jump on every opportunity to get a chance to work overseas, you begin to wonder if going the other way makes sense.
5. Why send money
Point number 4 makes us think about point number 1. Why should we send money to India when we do not foresee our future in India. Well, I am not talking about the money we send to our parents/ our relatives to buy them gifts and stuff. I am talking about the money we decide to put in our future. We decide to hold on to it in dollars until we reach a point that we are absolute certain about returning back to India. Indian investment is no longer lucrative.
6. It makes us think
Rupee slide makes us think. Makes us think that India has so much potential to set things right. Why is our Imports bill so high? Why cannot we make stuff for ourselves? Why is manufacturing sector taking a hit? Why are we not learning from China? Why do the temples in India with so much gold reserve not sell a part of their gold to government to reduce gold imports? Why is India not a lucrative option for FDI. Why did walmart have to put its expansion in India on hold? What happened to Ikea?
The more you think, the more frustrating it is. I have faith that this will stop someday. Somebody has to step up and do the right things. BELIEVE!
