Rupee being sold abroad at discount

New Delhi: Sachindra Chaudhuri, finance minister, today admitted in the Lok Sabha that Indian currency was used in exchange transactions in some countries of Southeast Asia at a discount.

Replying to a question by L.M. Singhvi, the finance minister, said that in the unofficial markets for which quotations were available, the Indian rupee had been selling at a discount of about 25 per cent in recent weeks.

He said the “modus operandi” of unauthorised dealings in Indian currency consisted essentially of transactions in such currency illegally exported or carried and sold to persons returning to India.

Singhvi said the government wanted to bring external value by devaluing it. He asked whether by this illegal transaction of Indian currency, the promised benefit from devaluation had disappeared.

Chaudhuri replied it was not correct to say the benefits of devaluation had disappeared. On the other hand, it had just begun to be felt.

Tarakeshwari Sinha said that even after devaluation there existed a disparity in value of Indian currency. She wanted to know the steps the government proposed to take to remove it.

Chaudhuri said that so far as legal transaction of the currency was concerned, there was some improvement. The government was taking every step to put down those indulging in illegal currency transaction.

Peter Alvares asked the finance minister to cite examples of improvement made in any sector as a result of devaluation.

Chaudhuri said that he could give three examples. He said the government found it difficult before devaluation to export Alkaloids made out of opium. Now, they were able to cover the loss and also export to foreign countries.

He said there was stagnation in the export of rubber tyres. After devaluation, there were now exporting tyres. India is also in a position to export woollen goods from Kanpur and Punjab.