Former Finance Minister and Congress leader P Chidambaram has punched holes in Finance Minister Nirmala Sitharaman's theory that the rupee has not weakened but it is the dollar that has strengthened.
Ms Sitharaman made the comment while defending the 8 per cent slide in the value of the rupee against the dollar this year. The BJP had defended her comment, though it also sparked a meme fest on social media.
Mr Chidambaram told NDTV today that Ms Sitharaman made a "thoughtless" comment.
"If she contests an election, and god forbid, she loses, I expect her to say 'I did not lose, my opponent won'. What kind of a statement is this? Therefore, I think it is best to leave it there. It was a thoughtless statement. Somebody may have told her it was a clever statement. It's hardly anything but clever," Mr Chidambaram said.
The BJP had doubled down on the Finance Minister's comment, pointing at how the dollar has appreciated against most currencies, while the rupee hasn't depreciated against all currencies "like it happened during the UPA [United Progressive Alliance] in 2013", which would then be called an actual case of the rupee getting weaker, but is not the case now.
Mr Chidambaram, however, said the BJP's defence makes little sense as the comparison with the dollar is incorrect.
"If my per capita is the same as your per capita, if my household savings are the same as your household savings, if my GDP [Gross Domestic Product] is as big as your GDP, then surely you can compare my currency with your currency. If all other things are not comparable, there is a huge difference, what is the point in saying my currency has fallen less than your currency?" the former Finance Minister told NDTV.
"It all depends upon the stage of development of the country. And India's stage is quite low. It may be the fifth largest economy because of our population. Even if per capita is low, GDP will be high. We're poor, there is hunger, there is malnutrition, there are huge deficiencies in health and education, so you have to be modest about it, you have to be humble about it, instead of saying my currency has not fallen lower than your currency. Say what are you going to do to stabilise it," Mr Chidambaram said.
India's forex reserves stood at $532.87 billion in the week through October 7, much less than $642.45 billion seen a year back. The Reserve Bank of India and Ms Sitharaman have in the past attributed the decline in the forex reserves to valuation changes due to the appreciating US dollar.
Ms Sitharaman had told reporters in Washington yesterday, after attending the annual meetings of the International Monetary Fund and the World Bank, that "I would look at it as not rupee sliding, I would look at it as dollar strengthening, dollar strengthening incessantly."
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