The Food Security Bill has nothing to do with the Rupee fall

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Many have been prompt in reacting to the Rupee’s devaluation and have blamed it on the UPA Government. PR managers of Odisha CM and the likes of him turned every stone to make sure that the news of the said reaches every necessary corner. However, I am certain that the said knowledgeable people are better versed with the Rupee than many of us. I am sure that they are well aware that it’s not just the Indian Rupee but the currencies of Indonesia, Brazil, South Africa & Turkey too have taken huge bashings from the USD in the last few months. The primary reason for this fall of about 13% to 21% is ‘Global’ and not domestic.

Since 27^th of August 2013 the tension in Western Asia has been growing and that has fueled more trouble. The fall of the INR to an all time low of Rs.68.80 to a USD also has a direct correlation to the Obama Government’s preparedness for bombing Syria. Ignoring the global scenario and attributing the fall in Rupee and the Sensex to the passage of Food Bill or to the other reform policies of the UPA is being nescient. One who understands the Sensex and the bear operators should know that its celebration times for them and the bouffant operators thrive on pessimism.

The Food Security bill has been in debate for the past few years. Its implications had already been billed into the Union budget of India for year 2013-14. There was no such crash witnessed then? In fact the spending on the Food Security Bill would not be more than 0.3% per annum. The Government categorically has said that the fiscal deficit target of 4.5% would be adhered to for year 2013-14. Then why prevail with a negative sentiment?

If you refer to not only the Indian but Global history, investors have always been bias against any kind of welfare expenditure.  The basic psyche is that welfare schemes are bad for the capital market. But if you refer to the same history and look westward, you will find that a strong welfare framework has been a tool for the healthy expansion of capitalism.

If I am not too harsh, I will term the said rebuttal as being hypocritical. Hasn't the State Government of Odisha been facilitating welfare schemes for economically weaker sections of the society? Hasn't the CM of Odisha been riding on the UPA’s giving and reaping political dividends for him self and his political outfit?

I remember large investors & the people opposing the UPA-1 had rejected the then ‘farmer loan waiver’ but the same were very happy when massive loan restructuring were implied for big business houses. The Parliament of India has given a thumping support to the Food security bill and to various other reforms which have been brought in by UPA-2 but for political brownies the opposition benches will not miss a chance to take pot shots. The abyss between the political class and the capital market must be covered. In the history of mankind the growth of capitalists has never anteceded human development index. People with the contrary mindset need to ascribe to this truth. 

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