Rupee appreciation...may be deliberate by the government?

A few months ago, the Prime Minister Manmohan Singh has requested the private sector to consider the job reservation in it. There was no response (at least publicly) from any of the industry leaders. However, TATA’s have declined the request and clearly stated that is not possible. Again few months ago, the PM had expressed concerns over high salaries of executives of private firms.

With these two things in mind, consider what is happening now. Which private sector has maximum potential to offer jobs in the current circumstances? IT. All of you know that IT companies are what they are today, because their services are export oriented. Especially to the US. To be clear the dollar difference is what makes them superior to other firms. Over the past several years, dollar was hovering around 42-46 rupees. Last year during August/September dollar was around 47. Now it is around 40. What kind of growth would make it increase so sharply? I am not an economist. However, let’s see few things. We all know Indian economy is growing at 9-10 percent. And the US is growing at less than 4 percent. Even the last year also we have grown at the same rate. The job market in US is also good at present. But, why there is so drastic difference in the exchange rates with in a year?

Our PM is an economist more than a politician. And he has some best economists with him at the government. Chidambaram and Montek Singh Ahluwalia are his team. The PM, in my opinion is doing a crucial and careful experiment. If it was not deliberately by the government, I don’t see such drastic changes in the exchange rates. No doubt we are a developing country, we have a lot to learn, lot to do in terms of infrastructure, power projects, irrigation and agricultural sectors. Population control, education, literacy etc also need lot of improvements. Unless we see some developments in those areas it is hard to believe the economy’s health as it is being stated today. Coming back to reducing dollar difference, clearly we see the pressure on the technology companies. Already there are lots of predictions on salary cuts etc in the tech firms. See hasn't PM achieved what he expressed as a concern?

I may be wrong, but definitely there is something fishy going on.