The manufacturing industry in India, such as it is, just got a great deal more competitive in rupee terms because of the 40% depreciation over the last couple of years. That is precisely how a flexible currency ought to adjust to improve a deteriorating CAD. Beyond that, the government should focus on the enablers for manufacturing—electricity, roads, ports, telecommunication and credit—instead of sops or a prescriptive industrial policy.

Of these, electricity and credit are most important. RBI, in particular, can play a role in establishing a robust corporate bond market in India. This has fallen between the cracks at RBI and the Securities and Exchange Board of India (Sebi) and has been a costly laggard.

The most important thing to do to reduce oil imports is to eliminate oil-related subsidies. It is imperative that a proper market price be established for all petroleum products. Read More

Donate to IndiaSpend

Support IndiaSpend’s award-winning investigative journalism.

Your tax-deductible contribution to IndiaSpend will help us, and other publications around the country, reveal critical stories that otherwise wouldn’t be told - stories that make a difference!