Stronger Rupee = Stronger India
 
 
Let me ask a question first.
 
 
What type of economic strength is preferable to India?
A) A strong Indian economy fueled by its cheap labor due to a weaker
rupee against dollar, where the Indians end up working in shifts, late
nights, whole nights and what not... only doing low profile jobs which
foreign companies want to offload to India, so that they can concentrate
on high end works and become even better. For instance in IT field,
providing BPO services, support and maintenance work for products...
 
 
OR
 
 
B) A strong Indian economy fueled by its strong innovations and
products, no matter whether the rupee is strong or weak against dollar..
where Indians work only in regular office hours of 9 to 6, developing
cutting edge technologies and solutions, selling our world class
products both inside and outside India. For instance in IT field,
imagine operating systems, compilers, databases etc all coming out of
India..
 
 
I do not deny the fact that the IT boom in India came to a large extent
because of (A). Well and good, we have had the benefits of our cost
being cheap in western markets due to a weak rupee against dollar.. We
have had our share because of this advantage in the past 2 decades..
 
 
But at the same time doesn't it make sense to move towards (B), instead
of crying foul against rupee becoming stronger against dollar?
 
 
What a pity! Indian IT companies are feeling bad because rupee is
becoming stronger against dollar! Reason, their profits will go down
when the value of rupee is stronger, as every single dollar that comes
into their account now means lesser rupee than earlier..(if for instance
earlier they used to get 47 rupees for every dollar that comes in, but
today its less than 40!)
 
 
But isn't this a matter of celebration? Our rupee is gaining importance
internationally and is becoming stronger again.. How many of us know
that in 1947 when India got independence 1 Rupee was 1.2 US dollars?
 
 
These Indian IT companies instead of relying on a weaker rupee for their
profit should now look at coming out with innovative products and
technical solutions. What have these companies done in the arena of core
system products? Why don't we have any operating systems, compilers,
database systems, development platforms etc coming out of India? Why
don't we develop tools like photoshop or flash? We have talent, but they
all are working in American companies on these products.. Cannot our
Indian IT companies setup at least small teams to develop such products?
 
 
Instead they are planning to make their employees work on saturdays too
!
So that their profits can increase due to extra hours the employees put
in.. As if India doesnt have any other option other than cheap labour,
workaholic labor!! Are there no brains in India who can setup companies
developing products and make money just by printing out more serial
numbers and burning their product DVDs?
 
 
If Indian companies continue to depend on its weak currency, then how
would Indian economy survive in a world where all currencies have equal
value?
Survival of the fittest.. Only greater innovation can help us in that
case..
 
 
We need to have knowledge and technological advantage if India wants to
become a superpower, not low cost based cheap labor advantage! Let the
Chinese do it..
 
 
I hope that rupee becomes more and more stronger so that Indians are
forced to use their brains and come up with innovative products and next
generation technologies, than to provide low end services...
 
 
We need to create a situation where other countries line up to buy our
F-16s, to buy our operating systems, to buy our mobile phones and
I-pods, to buy our Boeing, to buy our Mercedes...
 
 
A stronger rupee means we can easily afford foreign trips! This is what
I wrote in one of my earlier blogs.
 
 
"A stronger rupee means Indians can buy things anywhere in the world on
par with developed economies! We dont have to spend crores of rupees
then to buy a Boeing! We don't have to pay tens of thousands of rupees
for international air travels! A stronger rupee means greater
international exposure! There wont be a difference between buying a
Maruti and buying a Mercedes! One can go on a trip to the Grand Canyon
just like the way one goes to Ladakh or Nepal ! How do you think
american citizens are able to tour all over the world? Because they earn
more? No. But because their currency USD is stronger.. and this is where
a strong rupee will lead us to!..."