Prime Minister Manmohan Singh said the Government should interfere as little as possible when things are going well, but when things are going bad, as they seem to be at present, it is the responsibility of the Government to be pro-active.
Addressing the annual general meeting of ASSOCHAM, Prime Minister Singh said: “The most immediate cause of worry is the recent volatility in foreign exchange markets. Much of this was due to global markets reacting to the likelihood of a withdrawal of Quantitative Easing III by the US Federal Reserve Bank. Large volumes of funds were withdrawn from emerging markets and there was a depreciation in many emerging market countries including Turkey, Brazil and South Africa.
“We too experienced a significant depreciation in the exchange value of the rupee. In our case, it was perhaps exacerbated by the fact that our current account deficit in the balance of payment had increased to 4.7 percent of GDP in 2012-13.
“I can assure you, we are committed to bringing the current account deficit under control by addressing both the demand side and the supply side of the problem. On the demand side, we need to reduce the demand for gold and the demand for petroleum products – the two biggest components of our trade deficit.” Read More