India News and Features Alliance (INFA) - Free Rupee, Free Poorest: CURRENCY FREEDOM MUST FOR PROGRESS, by Robert Kharshing, M.P., 17 May 07

It is indeed a matter of joy that India, a country we all love and cherish, is growing at about 9 per cent consistently. Joy that the Sensex is booming at over 13,000 points with 23 stock exchanges and over 9,000 listed companies. Joy that Bombay Stock Exchange is the second largest after the NYSE. Joy also that our foreign exchange reserves are almost 200 million USD and that our GDP has crossed 1 trillion USD.

But there is deep sadness in my heart too. Sadness because the poor are becoming poorer. In my constituency, tribal villagers in remote border areas have been reduced to eating food and vegetables which for centuries we have reserved for cattle, sheep and pigs. I am sad that farmers are still committing suicide. Sad that India’s share in the global trade is about just 1 per cent. I am sad that the gap between the rich and the poor is increasing. I am sad that tribal and poor youth have to become Maoists and take to violence because the Government has failed them.

What are the solutions? As a member of the Parliamentary Committee on the Welfare of SCs/STs, I have been thinking about what we can do for the poorest of all castes and communities across the country. Here are some suggestions which I hope that the PM and the Finance Minister will consider.

We need to radically reform the delivery systems in this country. Only such schemes for the poor should be considered which directly reach the poor without any middlemen involved. For example, let the poorest get a 1 per cent discount for loans and 1 per cent more for any saving deposits in banks. I am sorry to say that most of the current schemes are not working because of the middlemen and the misappropriation involved.

We must tackle corruption as a priority. Set up immediately a Transparency Commission. This Commission should consist of men and women of unimpeachable integrity like E. Sreedharan, the CMD of Delhi Metro, JM Lyngdoh, the former CEC, Arvind Kejriwal, the RTI proponent and the Magsaysay award winner. These are only suggestions. The Government could consider other names in consultation with the Opposition. This Commission without pointing fingers at anyone should indicate the loopholes and make binding recommendations within a fixed timeframe.

Free the rupee to free the poorest. On July 16, 2006, President Putin made the Russian Rouble fully convertible, totally free. It immediately went up 15 per cent against the dollar. Central Bank Governor of China, Zhou Xizochuan pledged that 2007 would be another year of extensive financial reforms, that China would pursue reforms in areas including exchange rate regime. The Yuan has gained 4.7 per cent against the dollar since it was revalued by 2.1 per cent in July 2005.

Why should the poorest tribal farmer in India have to slog and work 82 times more than the British farmer just to equal one pound? Why should the Indian poor farmer have to sweat it out 42 times more than the US farmer just to equal the US dollar. Why are we not freeing the rupee?

There are three freedoms that are paramount for any nation. Political freedom we got in 1947, economic freedom we got in 1991 but there is no currency freedom. We are still slaves to the dollar, the pound and the euro where the currency is concerned. All corrupt nations control their currencies. All free, transparent and powerful nations have a fully convertible currency. In 1947, $ one was Re 1.13, now it is about Rs.42. We want to bring down corruption, free the rupee. Inflation will come down. The huge oil bills will dramatically come down as the rupee goes up. The rich and the exporters have had 16 years of a controlled rupee. The Sensex has grown from 2000 points to over 13000 points over the last 16 years.

Is it not time to unleash the power of the common man by freeing the rupee. The rich have shares, mobiles, cars, fridges, foreign bank accounts. But the poor have none of these. He or she has only the rupee in their pocket. If you have freed the economy for the rich in 1991, it is time that you free the rupee for the poorest. Have we asked ourselves why there are no Indian beggars in the UK or US? Why are Indian beggars in their own country? Because however much he works hard, the rupee is not allowed to go up. It is okay for the Sensex to go up but not okay for the rupee to go up. If Mahatma Gandhi were alive he would have protested like he did against the Salt Law.

All modern economies---Japan, Britain, Germany, Russia, Singapore, the US, Canada, New Zealand and the European Union have a free currency. Why are we ashamed about the rupee? Why are we proud to count only in dollars? Are we a dollar economy? Where is our “izzat”, our pride in our rupee? When we go abroad, it is so shameful that most powerful economies have hard currencies for their citizens but we have a week, soft currency. The PM, the FM and the RBI should listen to the high-powered Expert Committee appointed by the Finance Ministry itself which wanted to turn Mumbai and India into an International Financial Hub. They have recommended freeing the rupee and making it fully convertible by December 2008.

Just as the Sensex has grown from 2000 points to over 13000, my dream is for 1 Re to equal 1 pound. Then everyone gains, not just the rich. From being a 1 trillion dollar economy we would become an 82 trillion dollar economy. Some leading national dailies have reported that 98 per cent of the total enterprises in the country are in unorganized sector. 92 per cent of our total workforce of 457 million in India works in the unorganized sector. Yet only 1.4 per cent was the outstanding bank credit given to the unorganized sector as on 1999-2000. When are we going to be inclusive and think of this sector---the rickshawpuller, the roadside dhabas, the vendors and the poorest? They would love the rupee to go up.

Why should a sweeper at Heathrow Airport come to India and live like a king just because his 1000 pounds (which should be just Rs.1000) become Rs.82,000 in India. In 1986, one pound was a mere Rs.16. Today it is about Rs.82. When will we have a free currency and not a slave currency? I lived for six years in the UK and saw first hand how rural Wales, rural Scotland and rural England had the same infrastructure and facilities as London. Because the pound was free, the gap between the rich and the poor was not so big. The same infrastructure and facilities should be available for our rural and tribal poor. Growth has to be inclusive. If the Sensex for companies is free, then after 16 years of good times, the rupee should also be unleashed and made free so that all can benefit from its progress. ---INFA