Why Indian rupee is constantly falling and why are the prices of petrol and diesel is also increase? Government of India, which produces oil 31 rupees per liter. but sold to the general public in more than Rs. 80. why? Why is the gap of 50 rupees? and price of petrol in our neighboring country, will also compare it with India.
From January 2018 to September 2018, Indian rupee has declined by about 13%, due to Investor has to spend 72 rupees to buy one dollar. Which is the only Indian rupee after Russia's currency "ruble".
when India became independent in 1947, it was one rupee equal to one dollar. But then Indian rupee has declined every year, and today Indian Rupee has gone up to 72 rupees per $1.
When the external value of a country's currency is reduced, means the internal value of currency remains constant, then such a condition is called devaluation of money. Which has been done three times in India after Independence.
1. price of crude oil will increase.
83% of the oil is imported to the Indian government, and this is the reason that the largest share in India's import bill is crude oil. the daily demand of crude oil in India was 93 thousand barrels in 2017, which in the year 2018, the daily demand of oil went up to 190,000 barrels. India imported 213.93 million tonnes of crude oil in 2016-17, which cost $ 70.196 billion, but there is a possibility of an increase of 25% in the year 2017-18 and the import bill increased to $ 87.725 billion There is a possibility of reaching.
The Economic Survey 2018 estimates that if crude oil price increases by $ 10 a barrel then it will reduce India's GDP by 0.2-0.3 percent.
if demand for crude oil will increase in India, then government will increase the import bill, government pay more dollar to other countries including Iraq and Saudi Arabia; This will increase the demand for dollar and in comparison, so the value of rupee will decrease.
2. USA and China trade policy
The United States has decided to increase taxes on imported products from many countries, including China, India and European Union. these countries also raised taxes on US products. prices of goods imported by India will also increase, due to India will have to pay more dollars, The supply of Indian rupee will increase in the market and this will increase the dollar's value, and decrease value of rupees.
3. lack of investor in India,
when a foreign investor in India withdraws his money and invests it in another country. take it out of the dollar, due to dollar demand increases. today the investor is decreasing, they all start coming out of the rupee, now more and more people start coming out of their dollars then the demand for dollar will increase.
according to the figures of NSDL (National Securities Depository Limited), this year end of April 2018, India has left 244.44 million dollars out of the country. which is 31% higher than last year.
4. The political
foreign investors are confusing that the government will remain or will change next year? And if a new government is formed then nothing can be said about how the foreign investor's policies will change; So foreign investors are making a plan to invest in countries giving better returns and taking out their money from India in a dollar.
5. India's Growing Trade Deficit
When a country's export bill less and import bill is high, this situation is called trade deficit. in 2017, India's trade deficit is $ 105.72 billion, which was $ 156.8 billion in 2018. means India has to spend more on imported goods and services than it earns from exports in dollars or other foreign currency. It means that the dollar in the Indian market is low, whereas its demand will be high, and according to the "rule of demand", "the stock which gets reduced, then its value also increases."
Pakistan price of one liter petrol is around Rs 52, Nepal is 68 rupees, Sri Lanka is 64 rupees, Bhutan has 57 rupees, Bangladesh is 71 rupees, and Myanmar is Burma 44 rupees per liter. in India more than 80 rupees in every city of India.
In India, the cost of crude oil is only Rs 31 per liter, The highest contribution in this is the different taxes imposed by the Central and State Governments. Which is Rs 19.48 per liter on petrol in Delhi and Rs 16.21 in Delhi. State Government VAT. In addition to this, the margin of refineries, oil companies, transportation and commissioning of petrol pump dealers, together. the customer has to pay 80 rupees or more to buy a liter petrol.
If Central and State Governments reduce taxes by 50% then the rates of petrol and diesel can be reduced to 20 rupees per liter.
from December 2017, 10% ithanol is also being added in the petrol which is sold in the country, which is a natural oil, and its cost of one liters comes to be about Rs 41.
we can just hope that the government will soon take necessary steps in this direction with the help of the Reserve Bank of India.